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Chelsea forked out £47.5m to sign the Germany international from Leipzig back in 2020.
But the 26-year-old has struggled since arriving in English football, managing a disappointing return of 23 goals in his 89 appearances for the Blues.
Chelsea have now decided to sell the striker back to Leipzig, according to transfer expert Fabrizio Romano.
"Leipzig are set to sign Timo Werner from Chelsea, here we go! Been told it will be a permanent deal and NOT loan. Werner will leave Chelsea," tweeted Romano.
"First call @Plettigoal today, now final details being discussed - it's done, personal terms are agreed since 1 month."
Chelsea have already allowed Romelu Lukaku to leave Stamford Bridge this summer, with the Belgium international rejoining Inter Milan on a season-long loan.
Should Werner also depart, it would leave Thomas Tuchel with just two senior strikers in his squad, Kai Havertz and Armando Broja.
Leipzig are set to sign Timo Werner from Chelsea, here we go! Been told it will be a permanent deal and NOT loan. Werner will leave Chelsea. 🚨⚪️🔴 #CFC— Fabrizio Romano (@FabrizioRomano) August 7, 2022
First call @Plettigoal today, now final details being discussed - it’s done, personal terms are agreed since 1 month. pic.twitter.com/RCnqNZAUFZ
Chelsea are reportedly interested in signing Red Bull Salzburg forward Benjamin Sesko, who has also been linked with Manchester United and Liverpool, as well as Stuttgart striker Sasa Kalajdzic.
Meanwhile, Tuchel has revealed that players at the club are reluctant to take on the "cursed" No 9 shirt at Stamford Bridge.
The number is currently available following Lukaku's move to Inter but no player in the squad has opted to take the shirt, previously worn by the likes of Fernando Torres, Gonzalo Higuain and Tammy Abraham.
"It's cursed! People tell me it's cursed! It's not the case that we leave it open for tactical reasons or for some players in the pipeline to come in and naturally take it,” said Tuchel, speaking ahead of Chelsea's 1-0 win over Everton in their first game of the new Premier League season.
"There was not a big demand for the number nine. Players sometimes want to change numbers but surprisingly nobody wants to touch it.
"Like, everybody who is longer than me in the club, tells me 'you know he had the nine and didn't score and he had the nine and he also did not score.' Now we have a moment, nobody wants to touch the number nine."