The 24-year-old ex-Blues striker, who joined Ipswich Town from City in January 2007, has been attracting interest from newly-promoted Stoke City.

Chester have a big interest in any deal involving Walters as they included a 20 per cent sell-on clause in the deal when the Birkenhead-born forward joined Ipswich – which could result in the Blues pocketing a cheque in the region of £400,000.

Walters joined Chester from Wrexham on a free transfer in the summer of 2006 and then joined Ipswich for a fee of £75,000 after impressing Portman Road boss, Jim Magilton, during two FA Cup ties against the Blues.

Chester managing director, Bob Gray, said: "It would be great to see another of our former players plying their trade in the Premiership.

"And a financial windfall as a result of a seven-figure transfer deal would be most welcome."

Stoke are believed to be making a £1million bid for Walters who has impressed Potters' boss Tony Pulis at Championship level last season.

The powerful front runner has been a big hit since arriving at Portman Road, and was voted Town's player of the year last season.

Walters has been linked with the Potters for the majority of the summer but nothing has yet materialised, with Ipswich apparently wanting more than the £1.5million figure offered for the player.

However, rumours have continued to surface that Walters will move to the Britannia Stadium and Town's refusal to comment on the speculation has only served to add fuel to the fire.

Reports have so far suggested that Stoke have already struck a deal for the 24-year-old, but the East Anglian club are unlikely to receive more than £2million.

Walters scored 13 goals in 39 games for Jim Magilton's side last season, including a hat-trick in a 6-0 win over play-off finalists Bristol City back in November, and he finished second in the Actim ratings for the Championship, behind Stoke's Liam Lawrence.

The two could end up fighting for the same spot on the right-wing next season but Walters can also play up front, an area in which City boss Tony Pulis is desperate to bolster.

Walters, who has apparently become determined to move to the Premier League with Stoke, had also been linked with West Brom who could yet rival the Potters for his capture following the departure of Zoltan Gera to Fulham.

Meanwhile, former Chester City captain, Carl Ruffer, has been appointed assistant manager at Bradford Park Avenue, where former Chester team mate, Dave Cameron, is the manager.

Cameron said: "I'll be delighted to finally get Carl in alongside me. I think it will be an ideal combination that will be good for Bradford."