Having celebrated his 18th birthday on June 4, the youngster will now head to Madrid where he will play for Los Blancos' Castilla reserve side.
A spell at Barca was previously cut short after they were found to have breached regulations regarding the acquisition of players under the age of 18.
He had been in Catalunya since August 2011, but headed home in March 2015 to join up with FC Tokyo.
Kubo had been highly-regarded during his spell at the famed La Masia academy system, with his outings for Barca’s youth teams earning him a billing as ‘the Japanese Messi’.
Those at Camp Nou had been hoping to be the ones to benefit from his obvious potential, but he has now linked up with their Clasico rivals.
Real Madrid said in a statement on their official website: "Takefusa Kubo will come in to strengthen the Castilla ranks next season.
"The top level of the madridista academy are set to get their hands on one of the most promising youngsters in world football. A technically gifted and hugely talented attacking midfielder, he possess wonderful vision, quick feet and has an eye for goal.
"At just 18 years of age, Kubo has already made his full Japan international debut (on June 9 against El Salvador). The Asian star joins the Whites from FC Tokyo, in Japan's First Division, where he has made 13 appearances in the league in 2019 (four goals) and three in the League Cup (one goal)."
Kubo linked up with FC Tokyo upon returning to his homeland and was initially used in their Under-23 side, but quickly progressed into the senior team.
He had a loan spell at Yokohama F. Marinos back in 2018, opening his goalscoring account for the club with a strike on his debut.
He has enjoyed a productive run of form since heading back to Tokyo, earning international recognition and a place on Goal's NxGn list.
Madrid will be hoping to see him progress positively as part of the Castilla squad, with the Blancos having already signed talents including Vinicius Jr and Rodrygo.
Prior to staking a claim for minutes at the Santiago Bernabeu, Kubo will get an opportunity to catch the eye at the 2019 Copa America, with Japan facing Chile in their first match of the tournament on June 17.