The Aston Villa boss is keen on the Irish full-back and Leeds are reported to be desperate to get him off their wage bill, according to the Sunday Mirror.
Gerald Krasner will not allow Leeds' longest serving player to go on the cheap and will demand at least £300k for the 30-year-old.
However, other reports suggest that O'Leary hopes to take advantage of Leeds' financial worries by offering a 'knockdown £1m' for Kelly.