Diego's agent Djair Ribas da Cunha admits the Brazilian is keen on the switch.
"The only thing left is for Wolfsburg and Atletico to reach an agreement," da Cunha told As. "He really wants to sign for the Madrid club.
"Atletico will benefit from him a lot. He has quality and thinks he will fit in well to the system under (Gregorio) Manzano (the Atletico manager).
"We have time until the end of August. We would like it (the transfer) to be soon although that doesn't depend on us."