Madrid: Croatian international midfielder Mateo Kovacic has joined Real Madrid from Inter Milan on a six-year deal, the Spanish giants confirmed on Tuesday.
"Real Madrid and Inter Milan have agreed the transfer of Mateo Kovacic, who will be tied to the club for the next six seasons," Madrid said in a statement.
According to reports in the Spanish media the 10-time European champions will pay up to 35 million euros (£24.8 million, $38.9 million) for the 21-year-old.
He will be presented to the club`s fans on Wednesday after undergoing a medical.
Kovacic began his career in his homeland with Dinamo Zagreb before moving to Inter two years ago, where he scored eight goals in 97 appearances.
However, Inter coach Roberto Mancini admitted earlier this week that financial fair play pressures had forced the Serie A side into selling one of their prized assets.
Kovacic will link up with international teammate Luka Modric at the Bernabeu, but is likely to find a starting place hard to come by despite his lofty price tag with competition for places in midfield fierce given the presence of James Rodriguez, Toni Kroos and Isco.
Madrid have had an unusally quiet summer in the transfer market, but Kovacic`s signing is in keeping with a recent trend by Los Blancos of signing the best young talent around Europe.
His arrival should, though, open the exit door for Asier Illarramendi after two disappointing seasons at the club with the Basque midfielder strongly linked with a move to Liverpool.