The La Liga side beat the Bundesliga champions 1-0 at the Bernabeu on Wednesday night which resulted in Bayern being leapfrogged in the market for the first time this season.
Carlo Ancelotti's side held firm against the visitors, who dominated possession, and will take a slender advantage to the Allianz Arena thanks to Karim Benzema's 19th minute tap-in.
Real Madrid, who are 7/4 to lift the trophy, are now 8/11 to reach the final, with Bayern given an 11/10 chance, having been 8/13 ahead of the opening leg.
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Sky Bet’s Dale Tempest said: “It’s marginal but we’re siding with Real Madrid to make the last two, while Atletico Madrid are 5/6 to come through the other semi-final.
“On that basis, it’s now 3/4 for this season’s winner to be a Spanish club, with an all-Madrid final now priced up at 9/4, although Chelsea fans will fancy their side to win the tournament at 9/2.”
Atletico Madrid, who were held to a goalless draw in the first leg of their semi-final with Chelsea on Tuesday night, are marginal third favourites at 4/1, with the Blues close behind at 9/2.
A Real Madrid v Atletico Madrid final is 9/4, Real Madrid v Chelsea is 12/5, Atletico Madrid v Bayern Munich is 3/1 and Bayern Munich v Chelsea is 16/5.
