Tottenham have announced that a deal has been struck for Luka Modric to join Real Madrid and Sky Sports sources understand he will undergo a medical on Monday, while the two clubs have signed a 'partnership agreement'.
Modric has blossomed into one of the Premier League's brightest stars since arriving from Dinamo Zagreb in 2008, making 160 appearances for Spurs and scoring 17 goals.
Chairman Daniel Levy had been keen to keep Modric at White Hart Lane and rejected interest from Chelsea last summer, but the Croatian again expressed a desire to leave during the current transfer window.
An agreement has now been reached with Real Madrid and it is understood that Modric will now travel to have a medical with the Spanish club, before finalising a switch ahead of Friday's deadline.
He is expected to pen a five-year contract, while the deal agreed is understood to be worth at least £33million.
Tottenham have also confirmed that a deal has been struck with Real which will see the clubs continue to work closely in the future.
"The club can announce that it has signed a partnership agreement with Real Madrid FC and reached agreement for the transfer of Luka Modric, subject to medical, to the Spanish club," read a statement on Spurs' official website.
"The partnership agreement will see the two clubs working together in respect of players, coaching, best practices and commercial relationships."
Real Madrid president Florentino Perez said: "The strong relationship and affinity between our two clubs has resulted in the cementing of a longer-term partnership and the successful transfer of Luka Modric.
"We are delighted to welcome Luka and look forward to working closely with Tottenham in the coming years."
Levy added: "Luka has been a terrific player for us and, whilst we preferred not to part with him, we are pleased that it is to Real Madrid, a club with which we now look forward to sharing a long and productive partnership."