The Argentina international is due back for preseason training in Madrid in the coming days despite his previous confirmation over wanting to leave the club this summer.
Alvarez boldly stated his desire to move on ahead of the 2026/27 LaLiga campaign, during the 2026 FIFA World Cup, with Barcelona heavily rumoured to be his preferred destination.
Atletico CEO Miguel Angel Gil Marin responded swiftly by confirming he will not accept anything less than Alvarez's full €500M release clause to consider a sale.
That stance appears to have blocked Barca's advance and Simeone is ready to bring Alvarez back into his squad plans.
"The situation is very clear, the club made a decision that Miguel Angel explained very well. We're very happy with Julian, and we'll help him to continue growing and improving.
"We have some precedents here, as we've already seen what happened with Griezmann. He had to demonstrate on the field the quality and stature he possesses, and I don't see any other way than to work together, as we have done these past two years."
Former Atleti star Antoine Griezmann controversially joined Barca in 2019, before returning on loan to Atleti in 2021, and permanently in 2022.
The Frenchman went on to break the club's all-time goalscoring record, but admitted it took years to regain the trust of the Los Rojiblancos fanbase.