Malaga will offer Isco a bumper new deal to ward off interest from Manchester United, Manchester City and Chelsea, according to reports in Spain.
All three Premier League heavyweights have scouted Isco extensively in recent months, and they are keen to bring him to England.
A number of European clubs have monitored the 21-year-old, but it is believed that the interest from England is the strongest.
The attacking midfielder, who was awarded the Breakthrough Player accolade in La Liga last term, has more than three years left on his existing deal.
However, Malaga are keen to finalise a new contract in order to up his buyout clause from £17m to £33m.
Isco has privately expressed his desire to continue at Malaga and the club are confident of sorting out a new deal in the coming months.