Crown Prince Mohammed bin Nayef, first in line to the Saudi throne, was given a personal tour of the Villa Certosa property last week and might take it off the ex-premier's hands for some €500 ($550 million), they said.
The 120-hectare (297-acre) estate on Sardinia's stunning Costa Smeralda coast boasts three villas and seven swimming pools.
It comes with a Greek-style amphitheatre, a lake, thousands of cacti, palm and olive trees and a secret grotto decorated with a mosaic of the god of the sea, complete with a tunnel which leads to the sea.
Party-loving Berlusconi also had an artificial volcano built on a hill which "erupts" with fireworks, lava effects and artificial earth tremors during parties hosted in the past for the likes of Vladimir Putin and Tony Blair.
Berlusconi is said to have gone off the villa after the Spanish daily El Pais published photographs showing bare-breasted young women amid cavorting guests.
The pictures emerged in June 2009, fuelling a scandal that erupted over Berlusconi's attendance at the 18th birthday party of an aspiring model, prompting his wife Veronica Lario to seek a divorce.
The villa was not the setting for Berlusconi's notorious "bunga bunga" parties, which took place at his Villa Arcore estate near Milan.
The Corriere della Sera daily said negotiations over Villa Certosa intensified after Saudi King Salman cut short a holiday on the French Riviera after locals protested against the closure of the strip of sand in front of his the monarch's villa.