The former-AC Milan superstar was signed by the La Liga champions for £56m in June 2009, but has struggled with injury and has barely featured under Jose Mourinho this season.
The Daily Express quotes reports from Spanish newspaper El Economista which suggest that Real Madrid are prepared to cut their losses on the Brazil international.
The club are thought to feel that their weekly outlay on Kaka's wages can no longer be justified, and they are ready to offload the Brazilian on a free transfer.
But Kaka's pay could prove a stumbling block when it comes to finding a new club as well, as the report claims Paris St Germain and AC Milan are both interested in signing the playmaker, but unwilling to foot the wage bill required to bring Kaka to their club.
The £56m man has featured sparingly in recent weeks, and has just one goal to his name this season.
But while Kaka has struggled, so have Real Madrid. The Spanish giants currently sit third as they look to defend their La Liga title, a full18 points behind league leaders Barcelona.
Whether Manchester United or Chelsea are able, or willing, to pay the kind of wages Kaka would command remains to be seen, but the report claims the Premier League pair would be likely to explore the option of bringing Kaka to England, should he become available.