The Santiago Bernabeu outfit have secured the services of the young attacker, who had also caught the eye of several Premier League clubs after his fine goalscoring exploitsReal Madrid has completed the transfer of promising youngster Jorge Franco from Diocesano for an undisclosed fee.
The 18-year-old attacker has been in impressive form for his club's youth team and had also attracted the interest of clubs such as Barcelona, Chelsea, Liverpool and Manchester United.
Nevertheless, he has now opted to join Real Madrid instead, and is delighted to move to the Blancos at the end of the season.
"Playing for Real Madrid is a dream. I never imagined that my dream of playing for the best club in the world would come true. I can't ask for more," Franco said to Marca.
"I'm living on a cloud right now. So many great things have happened this season. I never thought I would be able to score 26 goals in one season. I owe this all to Diocesano, who gave me confidence again."