The 22-year-old has struggled for game time at Stamford Bridge and has decided that his future lies elsewhere, despite the Blues offering him a new £60,000 a week contract that would be worth more than £3m a year.
Watford remain confident that they can take advantage of the current situation and lure Chalobah back to Vicarage Road in a cut-price deal.
Chalobah made 37 starts while on loan at Watford back in the 2012/13 season and he could be open to a return to the Hornets, although Swansea City have now entered the race for the youngster.
The Welsh side boast a potentially key weapon in the chase for Chalobah – Paul Clement.
The Swans boss was a coach at Chelsea when Chalobah was rising through the ranks, although Watford are still hopeful they can get a deal done.
Should Chalobah seek a move away from Chelsea or stay and fight for his place? Let us know your thoughts in the comments below.