The news comes after Tottenham, who were looking to replace Kyle Walker, reportedly pulled out of the race after baulking at the £25m fee, leaving Chelsea as the main contenders for the 23-year-old’s signature.
Antonio Conte wants to increase the squad depth before the transfer window closes, and feels that a move for the right-back would offer some great competition for a place in the back-line.
The Portuguese international would give players like Cesar Azpilicueta and Marcos Alonso a place to fight for, as Chelsea look to retain their Premier League crown.
Cancelo could potentially become Chelsea’s sixth summer signing, following the arrivals of Ethan Ampadu, Antonio Rudiger, Alvaro Morata, Willy Caballero and Tiemoue Bakayoko.
The former Benfica man played 37 times for Valencia last season, scoring once, as he helped his side finish 12th in La Liga.