Papelbon's contract, which calls for a $13 million salary this season with a $13 million option for 2016 that vests if he finishes 48 games this year, includes a no-trade clause that can block deals to 17 teams.
A source told ESPN that Papelbon can block a trade to the Brewers, but would waive that if the vesting option for 2016 is guaranteed.
A trade to Milwaukee is not imminent, sources said.
The Phillies' desire to trade Papelbon is no secret as they start a massive rebuild that already has seen more than $40 million shaved off their estimated opening day payroll.
The 34-year-old Papelbon had 39 saves and a 2.04 ERA last season, but his flagging velocity and perceived negative attitude -- Papelbon was suspended for seven games last September after grabbing his crotch following a blown save -- led to them looking for a trading partner.
After seven successful seasons in Boston, Papelbon joined Philadelphia on a four-year, $52 million deal. Over his 10-year career, he has a 2.37 ERA, 325 saves and 721 strikeouts in 627 1/3 innings.