The 20-year-old has become one of Europe's most highly-rated young defenders since joining the Portuguese club from FC Midtjylland in January last year.
During his relatively short time with Ruben Amorim's side, Diomande has made 38 competitive appearances and chipped in with three goals.
Despite having a contract with Sporting until June 2027, the youngster is already attracting interest from across Europe.
Spanish giants Real Madrid are considering a move, while Chelsea, Arsenal and Newcastle United are all said to be in the race to secure the player's signature.
Diomande is currently representing the Ivory Coast at the Africa Cup of Nations, where he is set to be watched by scouts from Chelsea and Arsenal.
Newcastle are also expected to send scouts to monitor the Sporting defender, who played 77 minutes in his country's 2-0 win over Guinea-Bissau on Saturday.
According to football.london, Chelsea have already held discussions with Diomande's employers over a possible transfer.
The report claims that the Premier League club made contact with Sporting last month to discuss the player's availability.
Sporting have allegedly made it clear that the player's £69m release clause would need to be activated for them to consider a sale this month.
While the Portuguese giants are reluctant to entertain offers below the release clause, their stance could change in the summer, as they would have the time to scour the market for potential replacements.
Although Chelsea currently boasts a number of central defensive options, they are on the lookout for reinforcements with at least a couple of players heading towards the exit door.
Academy product Trevoh Chalobah continues to be linked with a departure after seeing a summer move to Bayern Munich fall through, while Malang Sarr has also been deemed surplus to requirements at Stamford Bridge.
The experienced Thiago Silva is another player at risk of leaving in the near future, with his current contract set to expire at the end of the season.
In addition to Diomande, the Blues are also tracking Nice defender Jean-Clair Todibo and their academy product Marc Guehi, who currently plays for Crystal Palace.