It had previosuly been reported that Juventus and Spurs were the two teams battling it our for the Portuguese's signature, but it now appears that Chelsea have stolen a march on their rivals by making an official enquiry.
Chelsea are keen to sign a new wing-back this summer are English publication 'The Daily Mail' claims that Antonio Conte's side are also closely tracking PSG's Serge Aurier, though the Londoners are reluctant to make a move on that front until finding out the results of the Ivorian's pending court case.
Valencia need to sell before they can buy this summer and are thus open to serious offers for the majority of their squad.
Cancelo is higly-rated on the continent, the 23-year-old made 38 appearances for Valencia last season, showing his versatility by appearing at right full-back, right wing-back and even on the right wing.
The player is a serious threat going forward and has scored three times in just four appearances for his national side.