The likes of Manchester United have shown an interest in the World Cup-winning star this summer but Los Blancos are set to get a deal done, with the Germany international having flown to Spain on Tuesday.
Bayern CEO Rummenigge revealed that talks with Madrid are "ongoing", though he is adamant that the midfielder will only be sold if the Bundesliga champions are "offered a certain fee".
Confirming that Kroos is the subject of a possible deal between the two teams, Rummenigge told reporters: "Nothing is official yet, however he could be sold for a certain fee.
"I can confirm that Toni and us are in talks with Real Madrid."
The former forward also talked about the reasons behind his club's decision to potentially sell Kroos.
"It is clear we do not want to lose the player for free next year. We have a financial responsibility towards our club," he explained.
"Let me put it this way ... we were not able to achieve [a contract renewal] and then you can't exclude [the possibility of] a transfer after the World Cup. It is possible this will happen."
The 24-year-old has already won three Bundesligas, a Champions League, three DFB-Pokal titles and a Uefa Super Cup but he has been open about his desire to move elsewhere in recent times and previously referred to a move to Madrid as a “dream”.
Kroos, who represented Bayern on 51 occasions and scored four goals last season, was an ever-present in Germany's World Cup-winning squad, starting all seven of his side's games and scoring two goals in the 7-1 demolition of Brazil.