The 23-year-old will finalise personal terms on Monday before being officially announced as the Champions League winners' second signing of the summer transfer window
Real Madrid have reached an agreement with Monaco for the transfer of James Rodriguez, Goal understands.
In a deal that should see the Colombia international become the third most expensive footballer in the history of the game, Madrid will meet the French club's £70 million valuation, including performance-related variables.
With an agreement reached between the two clubs over the weekend, discussions have been scheduled for Monday to iron out the details of James's personal terms as Madrid aim to make the midfielder their second signing of the summer following the arrival of Toni Kroos from Bayern Munich.
An outline understanding on the 23-year-old's salary has been in place since Madrid president Florentino Perez decided to target the player as this summer's principle Galactico signing.
James was also one of a number of potential targets Manchester United had approached with a view to recovering the Premier League title this season.
The Colombian, however, made it clear that his preference was to continue his career in Spain if at all possible.
The arrival of the 23-year-old could spell the end for Isco at the Santiago Bernabeu, with Goal exclusively revealing that Liverpool are monitoring the playmaker's situation with a view to a summer bid.
In addition to the acquisition of World Cup Golden Boot winner James, Madrid have been working on a deal to bring a second Colombia star, Radamel Falcao, from Monaco and reached a breakthrough in talks at the beginning of July.
Falcao's return to Spanish football after a season in Ligue 1 is dependent on Madrid's medical department declaring themselves satisfied with the striker's recovery from cruciate ligament surgery.