, Martinez is on Florentino Perez's radar.
The former Swansea, Wigan and Everton manager is currently in charge of the Belgian national team and led them to the World Cup semi-finals in Russia.
But he lost his assistant Thierry Henry this month when the French legend took his first managerial job at Monaco.
And Martinez would surely be unable to turn down the opportunity to manage one of the biggest clubs in the world.
Thibaut Courtois has worked under Martinez for Belgium for the past two years but denied suggestions he would rather have the former Everton boss at Real Madrid over Conte or Jose Mourinho.
The goalkeeper tweeted: "I emphatically deny the information published today in @elpais_deportes regarding me.
"[The reports] include lies that hurt me as a professional and I expect a rectification by meditating on taking legal action."
And Martinez also has the backing of former Real Madrid player, manager and sporting director Jorge Valdano.
: "[Appointing Martinez] seems the best idea to me. A coach that could turn things around. He seems more adaptable than Conte.
"Conte has prestige because he's won in various countries, but Roberto [would] adapt to this team. It's not an easy job because there's no regular goalscorer."
It could also be bad news for Chelsea fans.
If Conte had become the new boss at the Bernabeu, it is unlikely Eden Hazard would have wanted to move to the Spanish giants.
But with Martinez getting the best out of Hazard at the World Cup for Belgium, he may be able to convince the board to bring in the Premier League star.
After Julen Lopetegui was sacked yesterday following the 5-1 humiliation in El Clasico on Sunday, Real Madrid Castilla coach Santiago Solari was placed in interim charge.
Solari will be in the dugout for tomorrow night's Copa del Rey clash at Melilla and remains the bookmakers' favourite to get the job on a permanent basis.
But SunSport exclusively revealed last night that Real Madrid want to bring in Tottenham manager Mauricio Pochettino by the end of next month.
The club have two weeks to appoint a new permanent manager as Spanish FA regulations state a new coach must be found within fourteen days.
Manchester City manager Pep Guardiola has expressed his sympathies for former team mate Julen Lopetegui following his sacking at Real Madrid