Madrid is poised to rejoin the Formula One calendar after more than 40 years, with an official announcement scheduled for next week in the Spanish capital.
The sources spoke on condition of anonymity because they were not allowed to discuss the matter publicly.
Details on when the Madrid race will be added to the calendar were still being worked out, though reports mentioned a multi-year deal starting in 2026.
Barcelona is under contract to host Formula One races at the Circuit de Barcelona-Catalunya until 2026.
Spanish media said negotiations have been underway with Catalonia officials to see whether an agreement could be reached for Madrid to take over Barcelona's spot on the calendar before the end of the current contract.
There was also the less-likely possibility of having two races in Spain in 2026.
The Madrid race is expected to take place on a street circuit going through the city fairgrounds.
Details of the project were set to be announced next week.
Madrid city mayor Jose Luis Martinez-Almeida said recently, "some good news" for the capital was expected next Tuesday.
Madrid region president Isabel Diaz Ayuso said Tuesday that the F1 project would add "so much to the Madrid brand” and would "attract other great projects" to the region.
"We will do everything we can to make sure that the project can go through,” she said.
The last F1 race in the Madrid region was in 1981 at the Jarama circuit.
The Jerez de la Frontera track in southern Spain hosted races from 1986-1990, and also in 1994 and 1997.
Barcelona has been home to F1 in Spain from 1991 until now.
The country also hosted the European Grand Prix on a street circuit in Valencia from 2008-2012.
The contract with Barcelona was extended until 2026 five years ago after the track committed to improvements ahead of the 2022 season.
Red Bull driver Max Verstappen won last year's Spanish Grand Prix at the Circuit de Barcelona-Catalunya.
