Atletico Madrid have agreed to take Brazil playmaker Diego on loan from Wolfsburg.
His arrival at the Vicente Calderon is part of a major overhaul of the Atletico team under new coach Gregorio Manzano.
The 2010 Europa League winners have sold high-profile players Sergio Aguero, Diego Forlan and David de Gea and brought in a host of new faces such as Colombian striker Radamel Falcao and Turkish midfielder Arda Turan.
Diego joined Wolfsburg for 15million euros last year but was told in May he had no future with the Bundesliga club.
The 26-year-old made his name during a three-year spell with Werder Bremen which ended when Juventus bought him for almost 25million euros in 2009.