Milan are keen to boost their attacking options in the second half of the season because of the lengthy absence of Antonio Cassano due to health problems, and they have earmarked unsettled Manchester City striker Carlos Tevez as the perfect candidate to strengthen their squad.
However, Milan is only interested in signing the Argentina international on loan, while City wants to offload Tevez permanently.
As a result, the Serie A champions are looking at alternatives and have reportedly set their sights on Torres.
Milan are believed to be close to finalising a deal with Catania for striker Maxi Lopez, but club owner Silvio Berlusconi is eager to acquire a high-profile player, and would rather sign Torres instead.
The Spain international has been unable to make an impact at Chelsea since joining the Blues from Liverpool in January 2010 for a fee of around 50 million pounds, and there has been plenty of speculation about his future in recent weeks.
It seems unlikely that Chelsea are open to farming the 27-year-old out on loan following recent comments from manager Andre Villas-Boas.
The Portuguese boss stressed last week that he still has confidence in Torres and declared the striker not for sale at any price.
Elsewhere in Serie A, Milan's cross-town rivals inter are reportedly lining up a move for promising Universidad de Chile youngster Igor Lichnovsky.
La Gazzetta dello Sport report Inter are desperate to add some reinforcements to their defence during the transfer window, and boss Claudio Ranieri reportedly sees the 17-year-old Lichnovsky as the perfect addition to their ageing squad.
Lichnovsky is a product of the Universidad de Chile youth academy and made his first-team debut earlier this year.
The centre back is considered to be one of the brightest prospects in South America at present and has previously been linked with a move to Premier League giants Chelsea.
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