According to English publication 'The Daily Mail', the 'Blues' sent scouts to watch the Jamaican in action in Leverkusen's 2-0 win against Stuttgart last Friday, with the 20-year-old stepping up with two assists.
Chelsea have been aware of the flying flanker for some time and considered bringing the player in last January before he joined the German side from Genk.
However, with another year of development under his belt in one of Europe's top leagues, Chelsea have now decided to make their move, lodging a £22m bid.
That offer was swiftly rejected by the Germans, who are reluctant to sell their precocious talent and it is unclear at this point if Chelsea will return with an improved offer.
Bailey has starred for 'Die Werkself' so far this season, scoring five goals and laying on four assists in just 13 games in all competitions.
The youngster is renowned for his pace and dribbling skills, whilst his ability to play on either flank makes him the perfect long-term alternative to the likes of Willian and Pedro.
However, Chelsea are by no means the only side keeping a close eye on Bailey, with Manchester United, Liverpool and Barcelona all closely following his development.