Tottenham have been keen to move the 26-year-old this summer with Lo Celso apparently having no future in north London under Antonio Conte. He has been training individually since his return for the start of the pre-season.
The Argentine spent the second half of last campaign on loan at Villarreal, making 22 appearances and scoring once for Unai Emery’s side.
Lo Celso will now return to Spain for the 2022/23 season, with the deal not including any option to buy Villarreal next summer should they wish to make the move permanent.
However, it is suggested that there is a clause allowing Spurs to cut short the loan in January if they wish to sell him to another club.
After a revenue-heavy summer, Tottenham are hoping to continue freeing up wage bill space by finding clubs for a number of players who are not part of Conte’s plans.
Tanguy Ndombele, Sergio Reguilon and Harry Winks have all been transferred and are training on their own. Bryan Gil and Pape Matar Sarr could leave on loan before the window closes, while Japhet Tanganga could also potentially leave.