The Spanish giants were linked with the Argentine last year, and have been further impressed by his stunning displays for the Sky Blues this term.
With Karim Benzema attracting attention from Paris Saint-Germain, Los Blancos are believed to be ready to up their efforts to land a new forward as a potential replacement for the Frenchman.
Aguero is seen as the prime candidate, with the South American star having a proven record in La Liga after a successful spell with Atletico Madrid.
Real chief Carlo Ancelotti is also said to be a fan of the City hit-man, and sees him as the ideal man to play in between Cristiano Ronaldo and Gareth Bale in what would be one of the world’s most feared attacking lines.
Liverpool’s Luis Suarez is also a target, but with the Uruguayan ace now making noises that he is content at Anfield a summer move may be off the agenda.