The France international is believed to be the Spanish club’s alternative target at left-back this summer, should they fail in a move for No.1 choice Andy Robertson.
Villa are not actively looking to sell Digne, while the player himself is settled in the Midlands and happy at the club.
But Villa would also be unable to ignore a firm offer from Atletico, due to the ongoing challenge of complying with Uefa’s cost control measures which limits the amount clubs can spend on wages, in relation to revenue.
Digne, who joined from Everton for £25million in January 2022, is one of the highest earners on Villa’s books and while boss Unai Emery has been happy with his performances, the club are yet to offer him a new contract despite his current deal having only 12 months left to run.
Moving to Atletico might also be attractive for a player whose displays for Villa have seen him break back into the France national team.
Digne, who turns 32 next month, is eager to be involved in next summer’s World Cup and may consider playing in the Champions League provides the best platform for keeping his place in the squad.
Villa signed another left-back, Ian Maatsen, from Chelsea last summer for £37.5m but it was Digne who started the vast majority of Premier League matches.
The former Paris Saint-Germain and Barcelona star previously saw off competition from Alex Moreno in the position and any doubts Emery had about his ability when he first took charge in November 2022 have long been erased.
Digne was heavily linked with a move to Saudi Arabia two summers ago but instead stayed at Villa and played a key role in the team which secured Champions League qualification the following season. Last season he made 46 total appearances in all competitions.
Key to Digne’s future will be what happens with Robertson. The Scotland international is facing the likelihood of a reduced role at Liverpool next season with the Reds favourites to sign Milos Kerkez from Bournemouth.