It's believed O'Reilly is looking for a five-year contract worth closer to $5 million per season, while the Avs are only willing to pay him closer to $3.5 million per season.
Avalanche GM Greg Sherman has entertained trade calls for O'Reilly, though nothing is believed to be imminent.
A source close to the situation told TFP "a trade seems to be the only solution, at this point."
During a segment on TSN called "Insider Trading" aired in the first intermission of Tuesday night's game between the Montreal Canadiens and Tampa Bay Lightning, TSN's Darren Dreger said the Avs are looking for "a roster player and a top prospect" in exchange for O'Reilly.
Later, Avalanche beat reporter Adrian Dater of the Denver Post posted on his Twitter account that "O'Reilly's days as an Av have been over for a while now. He will not be back."
The Buffalo Sabres, Florida Panthers, New York Islanders and Toronto Maple Leafs are among the teams interested in O'Reilly.
O'Reilly, drafted by the Avs in the second-round, 33rd overall, of the 2009 NHL Entry Draft, collected 18 goals and 37 assists for 55 points in 81 games with the Avalanche last season, when he made a base salary of $900,000.
