Real Madrid have reached an agreement with Bayern Munich midfielder Thiago Alcántara as a replacement for Mateo Kovavic, who joined Chelsea on loan this week, with only a final fee needing to be agreed with the German outfit.
Thiago has been widely expected to leave the Allianz Arena this summer as he searches for a new challenge after five seasons with the Bavarian giants, and Real's new boss Julen Lopetegui is said to rate the 27-year-old highly following their time together for the Spanish national team.
According to Spanish radio station Onda Cero, the Spanish giants have agreed personal terms with the midfielder and Bayern are said to be willing to negotiate his exit for a fee which is expected to be between £36m and £45m - due him to having three years remaining on his contract.
The two clubs are understood to be on good terms over transfers, despite Real's interest in recalling James Rodriguez and acquiring Robert Lewandowski this summer.
Bayern's new boss Niko Kovac views Thiago as a player who can be moved on, with a return to his homeland on the cards.
The 27-year-old spent his early career with Real's fierce rivals Barcelona and despite being linked with a return to his former stomping ground, a move to the Bernabeu appears more likely after the Blaugrana recently signed his Bayern teammate Arturo Vidal.
It remains to be seen whether Thiago would in fact join a rival club, but his versatility makes him an attractive proposition for Lopetegui as he looks to stamp his mark on the reigning European Cup holders after replacing Zinedine Zidane over the summer.
The pair are well versed with each others style having risen through Spain's national ranks together from the Under-21 European triumph in 2013 all the way to the senior level.