Villa boss Unai Emery is a long-term admirer of the Portuguese star, who spent last season on loan at Barcelona.
The English club are prepared to bank around £60 million for Moussa Diaby who got signed from Bayer Leverkusen last summer as he is set to join Saudi league side Al Ittihad.
It is believed Felix could be the man to replace him in their attack five years after he signed for Atletico Madrid from Benfica in a £113million deal.
That would see the Portuguese make a return to the Premier League after he spent the second-half of the 2022/23 season on loan at Chelsea.
The 24-year-old scored four goals in 20 appearances in what proved to be a campaign to forget for the Blues as they finished 12th in the Premier League.
At Atletico Madrid, Felix has netted 34 goals and assisted another 18 across 131 appearances and won LaLiga with them in 2021, as well as being named as their Player of the Year in the following campaign.
He enjoyed a successful stint with Barcelona last season as he scored on ten occasions and provided another six assists.
However, he could be set to leave Spain for good this summer and join a Villa side who have already been active in the market.
Felix could become their eighth signing of the window so far, which has already seen them welcome Ian Maatsen from Chelsea.
Villa’s spending has been alleviated with the departure of Douglas Luiz to Juventus in a deal believed to be worth £42million, with Iling-Junior and Barrenechea heading the other way.
Tim Iroegbunam, Morgan Sanson and Viljami Sinisalo have also left permanently, with Calum Chambers exiting to Cardiff.
Philippe Coutinho has joined boyhood club Vasco da Gama on loan and Filip Marschall has signed with Crewe Alexandra until the end of the season.
