The Blues owner Roman Abramovich is ready to raise funds for the Atletico Madrid star who has a release clause of £48 million in his contract.
Manchester City and Real Madrid are other big clubs trying to lure the 26-year-old but Chelsea are favourites after Falcao was impressed by the European champions' desire and ambition to be world's best.
Financial troubles could force Atletico to cash in on their star striker who could leave in either January or during the end of the season in order to secure a Champions League spot for his current club.
But Chelsea are certain to ditch their current forward Torres after scoring only four goals in the league. The Spaniard had huge boots to fill after the departure of legend Didier Drogba and though the management backed Torres to fire, the former Liverpool only showed glimpses of form recently.
The 28-year-old could move to home club Atletico in a deal which takes Falcao to Stamford Bridge.
Falcao also tormented Chelsea during the UEFA Super Cup scoring a hat-trick against them while Torres was left frustrated against his former side.