Sergio Canales' father and agent, Angel Canales, claims his son has agreed to join Real Madrid.
The Racing Santander teenager has shot to prominence over recent weeks, with a number of eye-catching displays drawing admiring glances from Europe's top clubs.
At just 18-years-old the talented playmaker has become one of the continent's hottest properties.
Such interest has made it virtually impossible for Racing to convince the youngster than his long-term future lies at El Sardinero.
They could, however, benefit from the agreement reported to have been struck with capital giants Real.
Los Blancos are said to have agreed a five-year contract with Canales, with Racing set to receive €6million compensation for a player who would be out of contract in the summer.
Real are also believed to have agreed to send the youngster back to Racing on loan for the next two seasons, with regular first-team football needed to help aid his development.
Chelsea, Barcelona and Manchester City were all reported to have been chasing Canales' signature during the January transfer window but, while they were prepared to offer a better financial package to player and club, the Spain Under 19 international feels a move to Madrid is the best choice for his career.
"The decision was Sergio's and he thinks that Real offer the best option in a sporting sense," said Angel Canales.