And although Real president Florentino Perez will not approach potential replacements until the end of the season, Bernabeu chiefs have already begun to draw up a list of candidates.
Radio Cadena Cope reports Villas-Boas is under consideration.
Despite suffering a dismal time at former club Chelsea, the 35-year-old has begun to recover his reputation as one of Europe's brightest coaching prospects.
Could AVB be tempted away? Is he the right man for Real Madrid? Give us your shout below...