All tests conducted on Kroos up until this point have come back negative but he is now at home as per COVID-19 protocols.
Madrid is playing away against Athletic Bilbao on Monday (AEST) in its penultimate LaLiga game of the season.
It is locked in a thrilling title race with Atletico Madrid and Barcelona, as its city rival leads the standings by two points with only two matches to go.
"Real Madrid reports that our player Toni Kroos is currently in isolation after being in contact with a person who has tested positive for COVID-19, although all tests carried out on the player have come back negative," a statement from the club read.
It will be hoped that Kroos' situation does not evolve as Federico Valverde's did last month.
Valverde initially had to isolate because of being a close contact before producing a positive test five days later which then ruled him out of a key UEFA Champions League match with Chelsea, a tie that Madrid would ultimately go on to lose.
Kroos has been a key figure for Madrid this season, featuring in 28 of its LaLiga matches.
After a gruelling schedule, he was rested by Zinedine Zidane last time out against Granada ahead of the testing trip to San Mames.