The report claims Gundogan would likely cost around £21.5m, and while that price may make eyes water at White Hart Lane, Real Madrid are reportedly considering a move for the midfielder.
Gundogan is one of several defensive midfielders under consideration at the Bernabeu. Reports claim Xabi Alonso is yet to sign a new contract at Real Madrid - his current deal expires at the end of next season - and Gundogan, along with Manchester City's Javi Garcia, is one of the candidates to replace him.
22-year-old Gundogan has been capped five times for Germany, and has impressed in this year's Champions League.
Borussia Dortmund have progressed to the quarter-finals, where they will play Malaga, and Gundogan is one of several young talented German internationals to have flourished in the competition.
The reigning Bundesliga champions signed Gundogan from Nuremberg for £4.8m in 2011, but the report claims he's set to command a fee closer to £20m should Dortmund choose to sell him on at the end of the season.
Tottenham have been linked with the midfielder in the past, especially when it became clear Luka Modric was to be sold last summer.
Spurs now have Mousa Dembele, Scott Parker, Tom Huddlestone and Jake Livermore in the middle of the park.