The Tunisia international is set to be sold by Marseille this summer with sports director Andoni Zubizarreta under pressure to trim Rudi Garcia's squad.
L'Equipe says Tunisia international is expected to leave and is already attracting enquiries from Leicester.
Foxes boss Claude Puel is a fan of the attacker, who could move to England as a replacement for Riyad Mahrez.
Khaoui spent last season on-loan with Troyes.
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