Madrid are understood to be interested in signing Salah following a remarkable first season at Liverpool during which he has scored 43 goals to catapult himself into contention for the Ballon d'Or.
Liverpool have no interest in entertaining offers for the free-scoring 25-year-old, though, and it is thought that it would take a world record-equalling bid of £200m to even bring the Reds to the table.
However, The Mirror reports that Madrid are willing to offer Vazquez as part of the deal in order to bring that price down.
Vazquez has made 44 appearances for Real Madrid across all competitions this season, but only 23 of those have come from the start - although he was selected ahead of both Gareth Bale and Karim Benzema for the first leg of Madrid's Champions League semi-final against Bayern Munich last week.
The 26-year-old, who has been with Madrid since 2007 but only made his senior debut in 2015, has scored eight goals and created nine more for Los Blancos this term.