MADRID -- Real Madrid have agreed a deal with Arsenal to take Spain forward Jose Antonio Reyes on loan for one season in exchange for Brazil's Julio Baptista, the Primera Liga club said on Thursday.
The agreement includes an option for the clubs to buy the respective players at the end of the season-long loans, a Real spokesman told Reuters.
Although the clubs are in agreement, the players have yet to sign their contracts.
Reyes, 22, has been an inconsistent performer for Arsenal since his move to the London club from Sevilla in January 2004, and has made no secret of his desire to return to Spain.
He has been a long-time target of the nine-times European champions.
Real's 24-year-old midfielder-cum-forward Baptista, who has failed to make it into new coach Fabio Capello's plans, was a target for Arsenal before he joined Real from Sevilla last year.
He was reported by Spanish media to have passed a medical with Arsenal.