The Santiago Bernabeu side are keen to sign the 18-year-old on loan until the end of the season, with an option to sign him on a permanent deal for a fee of €5 million come June, potentially rising to €10m depending on a number of variables.
Batalla has been capped at Under-20 level for Argentina, but has yet to make his senior debut for River Plate.
Madrid have been keeping a close eye on the youngster's development ever since seeing him in action in Doha at a training camp organised by the Aspire Academy and the Iker Casillas foundation back in December 2013, while the shot stopper also shone at an U-17 tournament with River Plate in Madrid that same year.
Batalla would start his time at Madrid with the club's Castilla side in order to allow him to adapt to his new surroundings before potentially making the step up to the senior side, a strategy Madrid previously employed with Brazilian midfielder Casemiro.
The Champions League holders are hopeful of concluding a deal by the end of the week, allowing Batalla to focus on the South American Under-20 Championship, which is due to kick off on Wednesday January 14.
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