The Champions League winner confirmed it has signed the Mexico international on a season-long loan with an option to buy.
Madrid was in the market for a striker following the exit of Alvaro Morata to Juventus earlier this summer and the club has now found the backup for starter Karim Benzema that coach Carlo Ancelotti had requested.
"Real Madrid and Manchester United have reached an agreement over the loan deal of Javier 'Chicharito' Hernandez, who will be playing for Madrid this season," a statement on Madrid's website reads. "Madrid have an option to buy the player outright."
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The 26-year-old had joined Manchester United from Guadalajara in the summer of 2010 and had since made more than 100 Premier League appearances for the Premier League outfit.
Nevertheless, he made many of his appearances coming off the bench because of the presence of Wayne Rooney and Robin van Persie at the club and he was keen to move on.
Hernandez won two Premier League titles during his time at the Old Trafford outfit.