The Blues boss Phil Scolari is ready to spend between £3m and £5m of his £10million transfer budget on Owen.
The 28-year-old’s current contract with Newcastle expires at the end of the season.
Scolari is looking for cover for Didier Drogba and Nicolas Anelka and tried first to move for Brazil striker Luis Fabiano, but were priced out of a move.
Sevilla set a £25million price tag on Fabiano.
The Sun reports that Owen will face a cut in his salary if he decides to join Chelsea. He currently earns £108,000 a week at Newcastle, but the Blues are only prepared to offer around £60,000 a week.
