The Vatreni boss says the playmaker will move to the Spanish side, and is frustrated with his midfielder's lack of game time under new Spurs manager Andre Villas-Boas.
Stimac acknowledged that the situation the 26-year-old finds himself in is not ideal, and that his lack of preseason game time will have left him lacking sharpness.
However, the 44-year-old is convinced that Modric will sign for Los Blancos by the time the Spanish transfer window closes on Aug. 31.
"I don't like the situation that he is in at all, he has not played any matches at all this summer," he told AS.com.
"He will end up signing for Madrid before the market shuts."
The Spurs No.16 has scored 13 goals in 127 appearances for the north London side. After missing out on a move to Chelsea last summer he now looks set to be granted his wish to depart.
Former West Ham defender Stimac was speaking ahead of Croatia's game against Switzerland in Zagreb, his first in charge since replacing Slaven Bilic at the helm.Follow GOAL.COM USA on