The Premier League club are currently banned from signing any players, but it is understood they will find out on Thursday if an appeal to overturn their transfer ban has been successful.
And if Chelsea are given the green light, they will be able to buy players in the next transfer window, rather than wait until the summer.
Goal claim the club are ‘confident’ of landing Sancho ahead of Manchester United either in January or next summer.
He is close friends with Blues stars Tammy Abraham and Callum Hudson-Odoi, who he grew up with in London.
And Sancho is expected to command a much bigger fee than the £72million arrival of goalkeeper Kepa Arrizabalaga from Athletic Bilbao at Stamford Bridge last year.
The England winger, who is valued at more than £100m, has appeared to be unsettled in Germany after a blistering 2018/19 campaign where he scored 12 goals and registered 14 assists in the Bundesliga.
Sancho’s numbers have been good this season, too, with five goals and six assists in 11 games in Germany’s top flight.
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However, he was dropped from the Dortmund squad for their 1-0 win over Borussia Monchengladbach after arriving back late from international duty in October.
And the former Man City youngster was substituted after just 36 minutes in Dortmund’s 4-0 thrashing to Bayern Munich last month.
It led to reports of Sancho feeling ‘humiliated and scapegoated’ by Dortmund for their inconsistent form this season, which has seen them win only six of their opening 13 games.
Sancho has also been linked with a big-money move to Real Madrid and Liverpool, but Jurgen Klopp refused to add to the transfer speculation earlier this week.
“He’s a very good player,” Klopp said.