Luka Modric has passed a medical at Real Madrid and completed his €37 million move from Tottenham, penning a five-year deal at the Bernabeu.
Reigning La Liga champions Real have been chasing Modric all summer and now finally look set to land their man after agreeing a deal with Spurs, which ESPN understands will total €37 million.
The transfer also includes a "partnership agreement" that will see future player and coaching exchanges between the two clubs, as well as friendly matches.
Real Madrid confirmed the news on their official website, saying: "Real Madrid and Tottenham Hotspur have reached an agreement for the transfer of the player Luka Modric, who will remain attached to the club for the next five seasons. Both clubs have also formalised an agreement of collaboration."
After months of negotiations, a Tottenham source told ESPN that the North Londoners were pleased with the final details of the deal.
"It might not have been a stipulation but the club were very keen not to sell to a Premier League club and are very happy he is going abroad and won't be playing against us for one of our Premier League rivals," the source said.
Spurs will use the money from the Modric transfer to fund an improved bid for Shakhtar Donetsk attacker Willian, though the club may not be willing to go as high as the Ukrainians' asking price of £20 million.
The Tottenham source added: "We are going to replace Modric and the money is available. We are looking for a creative player and Willian at Shakhtar is someone who interests the manager Andre Villas-Boas."
Villas-Boas is also understood to be keen to sign one of his former players at Porto, Joao Moutinho, though the two clubs are believed to be some way apart in their valuation of the player.
Meanwhile, Jermain Defoe will remain at the club amid interest from QPR, with Villas-Boas content with having the England striker, Emmanuel Adebayor and Harry Kane as striking options.
The North Londoners are also happy to keep hold of centre-back Michael Dawson despite accepting a bid from QPR for the player.
A Spurs source told ESPN: "The club are not desperate to sell him and would be happy if he stays but he understands the position that he is no longer first choice and might not get many games. QPR made a good offer, a very good one for a 28-year old. It is now up to Michael to see whether he goes or not."