The Spaniard joined AC Milan on a two-year loan deal over the summer but has found the back of the net just once for the Serie A club.
This has prompted speculation that Milan are keen to offload the striker and Sky Sports’ Spanish football pundit Guillem Balague believes a deal for the former Atletico Madrid striker to return to the Vicente Calderon has now been done.
Speaking to Sources on Christnas Day, Balague said: “Our understanding is that Chelsea, Atletico Madrid and AC Milan have reached an agreement for Fernando Torres to go back to Atletico Madrid.
“It was all discussed, negotiated and agreed yesterday. It seems it is all confirmed. We have not received details from the club yet but (Atletico manager) Simeone asked for Fernando Torres three weeks ago.
“In fact, he wanted him in the summer but there was a transfer fee to be paid at that time that Atletico Madrid could not afford. The suggestion is that Chelsea have let him go for free but in any case it seems confirmed that Fernando Torres returns home.”
Torres joined Chelsea from Liverpool for £50m in the 2011 January Transfer Window in the biggest transfer deal involving two English clubs.
The 30-year-old scored 81 goals in 142 appearances on Merseyside but failed to recapture that form for Chelsea, netting 45 times in 172 games prior to his loan move to Milan.
Balague added: “I think Fernando Torres needs to rediscover his love for football. For me that’s the most important thing. He did very well as we all remember at Liverpool but at Chelsea we saw a different Fernando Torres.
“His record was okay was under previous managers to Rafa Benitez. With Rafa Benitez he did well but it became very clear that Jose Mourinho did not have him in his plans.
“After that AC Milan was obviously a great alternative for both the club and himself but it just did not work for either and returning home for me is a way for him to rediscover his love for football.
“He’s wanted by the manager and that is another thing that has not happened in recent years. So all in all I think it is good for Fernando Torres and good for Atletico Madrid.”