The 25-year-old, who will see his contract at the London Stadium expire in 12 months' time, has spent the last four years with the Hammers, but he struggled for game time last season and started just 22 times across all competitions, with both Craig Dawson and Kurt Zouma preferred ahead of him.
The £30m arrival of Nayef Aguerd and the return of Angelo Ogbonna from an ACL injury is now set to see Diop fall further down the pecking order under David Moyes, who could be willing to let the Frenchman go for the right price this summer.
According to Sky Sports News, Fulham are in talks with West Ham over a potential deal to sign Diop, with the Cottagers discussing a fee in the region of £12m plus add-ons.
However, Sky Sports News journalist Dharmesh Sheth claims that the Hammers value the former Toulouse defender at £20m, and it remains to be seen whether Fulham are prepared to table an improved bid.
Marco Silva's side are also understood to have approached Manchester United over the availability of centre-back Eric Bailly, while they are closing in on the signing of Red Devils midfielder Andreas Pereira for around £10m and the loan signing of winger Manor Solomon from Shakhtar Donetsk.