The signing on fee for Kylian Mbappe will be around €100m and it will be paid across five seasons as Real Madrid close in on signing the star French forward in the summer.
The development was confirmed by renowned journalist Fabrizio Romano.
Mbappe has already announced that he will leave the club at the end of the season as his current deal with the French side Paris Saint Germain will conclude in June.
Mbappe, who joined PSG on a €120m deal from Monaco in 2017, is set to depart from the French capital after seven years.
The Frenchman will bid farewell to PSG after winning 14 trophies including six league titles. However, he couldn’t take his team to European glory as despite coming very close to winning in 2020, they lost to Bayern Munich in the Champions League final.
"I wanted to speak to you. I have always said that I would speak with you when the time comes. And so I wanted to announce to you all that it's my last year at Paris Saint-Germain," Mbappe said in a video posted on social media.
"I will not extend and the adventure will come to an end in a few weeks. I will play my last game at the Pac Des Princes on Sunday.
"It’s a lot of emotions, many years where I had the chance and a great honour to be a member of the biggest French club. One of the best in the world, which allowed me to arrive here, to have my first experience in a club with a lot of pressure, to grow as a player of course, by being alongside some of the best in history some of the greatest champions to meet a lot of people, to grow as a man as well.
"With all the glory and the mistakes, I have made. First of all, I want to thank the teammates all of the teammates that I had, all the coaches Unai Emry, Thomas Tuchel, Mauricio Pochettino, Christophe Galtier and Luis Enrique," he added.