The 24-year-old Portugal international may return to Stamford Bridge on a six-year contract with an option for a further season for an unknown fee.
Felix will return following a 2023 loan stint at Chelsea with this move, which is contingent upon a medical clearance.
In his 20 appearances during his prior stint in west London, he scored four goals.
Gallagher, an England midfielder, is expected to agree to a five-year contract with Atletico.
After being indefinitely sidelined, he had been working out by himself at the Cobham training facility of the team.
Gallagher’s £33 million move to Madrid was postponed due to the breakdown of Chelsea’s negotiations to buy striker Samu Omorodion; Atleti had to generate money through a significant first-team sell in order to finalize the deal.
Gallagher will now be able to sign at Wanda Metropolitano Stadium, where he was last seen nine days ago, anticipating a move before a delay forced him to return to London last Tuesday. Felix’s move to Chelsea will make this possible.
