Marca claim that Liverpool met with the player's father Paco Alarcon, who also acts as Isco's agent, to talk about a possible switch this summer.
Spanish sports newspaper Marca splashed the news on their front page under the headline "ISCO 2022", along with a large head shot of the Spain worldwide.
Isco has scored 31 goals in 184 appearances for Madrid since making his debut for the La Liga giants back in 2013 but the 25-year-old has been heavily linked with a move to the Premier League for some time.
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The report suggests that Isco's dad Paco Alarcon also met with Manchester City and Juventus, but in the end chose to renew his terms with the Champions League holders.
The deal has been on the table for the 25-year-old since Christmas and he has made a decision to commit after Isco's father and representative Paco Alarcon met with Real officials last week.
However, Isco staked his claim for a place in the Madrid XI on Saturday, with a match-winning display against Sporting Gijon. Despite the player's preference for the Premier League in case of a Madrid exit, his true desire was to stay where he is, and that's led to a renewal.
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