The 24-year-old attacker moved to Parkhead on an initial loan deal from Benfica in 2021 before making his switch permanent last summer for around £6.5m.
Jota has established himself as a star player for the Hoops in the last two seasons, recording 28 goals and 26 assists in 83 appearances across all tournaments.
The Portuguese scored 15 goals and provided 12 assists in 45 games during the 2022-23 campaign in which Celtic celebrated winning a Scottish Premiership, Scottish Cup and League Cup domestic treble.
Jota still has four years remaining on his contract in Glasgow, but the attacker is the subject of strong interest from the big spenders in the Middle East.
According to Sky Sports News, Al-Ittihad are in discussions with Celtic over a possible £25m deal for Jota, although they are yet to table a formal bid for the attacker.
Celtic are said to be keen to keep hold of their No.17 and will only consider selling him for a 'significant' transfer fee.
Meanwhile, journalist Fabrizio Romano claims that an agreement is "very close" between both clubs, with the player keen to move to the Middle East and discuss the final details of his contract.
Al-Ittihad are managed by Jota's Portuguese compatriot Nuno Espirito Santo, who has already made two notable signings this summer in the form of Karim Benzema and N'Golo Kante from Real Madrid and Chelsea respectively.
Benfica would be due 30% of any future transfer fee for Jota should the Scottish giants agree to cash in on the Lisbon-born attacker.
The potential departure of Jota comes at a time when Celtic have reportedly agreed a deal to sign versatile Australian forward Marco Tilio from Melbourne City.
Sky Sports News reports that paperwork is in the process of being finalised and the Hoops hope to complete the transfer at some stage this week.
Tilio, who can play on either wing or as a central striker, could become Brendan Rodgers's second signing of the summer after midfielder Odin Thiago Holm.
Meanwhile, star striker Kyogo Furuhashi has refused to ruled out a possible exit from Celtic this summer amid interest from Ange Postecoglou's Tottenham Hotspur.