The 20-year-old has emerged as one of the most sought-after talents in South America after building on a breakthrough season in 2016-17 with nine goals in 11 appearances this term.
His exploits have attracted attention from across Europe, with leading sides having expressed an interest in acquiring his potential.
La Liga giants Real had hoped that their global standing would fire them to the front of the queue, but star-studded ranks have actually worked against them as Martinez has decided to seek more regular football in Italy.
His representative, Roly Zarate, told Fox Sports on that future call: “Lautaro had an offer from Real Madrid but his choice was to go to Inter because he wanted the assurance of more game time.
“He also wants to be an important part of the club and to be at the centre of the current project.”
While a deal is in the process of being finalised, Racing are not expecting to bid farewell to Martinez any time soon.
The intention is that an agreement will be reached with Inter that allows the youngster to remain in his homeland until 2019.
Racing manager Eduardo Coudet said of the proposed deal: “Lautaro is very calm at the moment and he is very happy.
“I hope we can keep him until the end of the year. His departure in July will be totally up to him and will depend on what happens in the Copa Libertadores.”