The 24-year-old appears to be on the verge of exiting the club after United manager Louis van Gaal admitted he has no idea if his prized asset will be at Old Trafford next season.
Balague believes the Spain international has not yet made a decision on his future but did confirm he is the man Real have chosen to become the successor to Iker Casillas.
“He is a target,” Balague confirmed on Sky Sports News HQ. “They have been saying it for a while.
“There have been agents of goalkeepers – the top goalkeepers in the world in some cases – who have gone to Real Madrid and said ‘how about our guy?’ and the answer from Real Madrid is ‘we want de Gea’.
“He has not committed himself as has been published in the Spanish media. He hasn’t signed anything with Real Madrid but he has got a decision to make.
“What is interesting is that in the past the presence of Casillas would have been an issue but I’ve got the impression that he has changed his mind on that and he actually doesn’t mind.
“He will accept the challenge if he goes to Real Madrid and if Casillas is there.”
De Gea has been a revelation this season for United and looks a certainty to win United’s player of the year award for a second year running after becoming the first goalkeeper in the club’s history to earn the honour last season.
The Spaniard, who grew up in Madrid, is said to be drawn by the possibility of rejoining his family and girlfriend Edurne Garcia in his homeland but Balague revealed United are offering him more money than Real.
“On the table, there is an offer from Manchester United which increases his wages by five times and he will not earn as much money at Real Madrid,” Balague said.
“The money is an issue but he also has to make a decision that also is to do with personal interests – his family is not there all the time and his girlfriend would love to be in Madrid more than in England.
“All in all, it is a decision that is as much personal as it is professional.”
Sky Sports pundit Gary Neville stated on his podcast on Sunday that United should try and use a de Gea as a makeweight for Gareth Bale if the Spaniard is set on leaving.
However Balague dismissed the possibility and revealed his sources have told him neither the club nor the player are ready to give up on the union.
“He is staying at Madrid – end of,” Balague said. “There is no story there. Gareth Bale is going to be at Real Madrid next season.
“Is Gareth Bale the happiest? Is at the best he can be at Real Madrid? Certainly not.
“But there is more to come from Gareth Bale at Real Madrid and of course he would like to play in a position where he is more comfortable, play in a position similar to the one that made him famous and made him cost €101m.
“He needs more freedom on the pitch and to link up with Ronaldo in a different way. Why not Ronaldo as a number 9 with Gareth Bale behind him?
“It is something that will have to be decided, either by Ancelotti or the next coach, but Bale is definitely staying at Real Madrid.”