Into the final 12 months of his contract, Gallagher's spell at his boyhood club seems to be all but over after his future dominated the rumour mill pretty much since the start of the summer transfer window.
Spanish giants Atletico Madrid are the frontrunners to secure his services after reaching a full agreement with Chelsea over a £34 million ($43.5m) deal.
Although the Blues are open to selling him, the Blues have held extension talks with their academy graduate over signing a new short-term deal.
However, Gallagher has reportedly rejected a two-year deal with an option of a further 12 months, with the 24-year-old unhappy with the shorter length of the contract proposed.
Chelsea are reluctant to offer him a long-term contract, viewing him as more of a squad player. Consequently, he may find himself behind Enzo Fernandez, Moises Caicedo, Romeo Lavia, and Kieran Dewsbury-Hall in the squad.
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Reports emerged on Friday indicating that Gallagher has been excluded from the first-team setup as he prepares to return to training on Monday.
Enzo Maresca has addressed Gallagher's uncertain situation, stating that the club is working to resolve his future.
The Chelsea manager said: "At the moment, there is not any update on that.
"The only thing I can say is that he was in contact with the club to find a solution. I don't think it’s something new.
"In football, every summer, different clubs have some problems with some players, and then at the end, they find a solution and everyone is happy. Hopefully the same can happen in this situation."
The England international was seen at Cobham on Friday and has yet to enter discussions over personal terms with Atletico Madrid, who are seeking a decision from Gallagher sooner rather than later.
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