The Blancos have been hot on the trail of the youngster since he shot to prominence at the end of last year and have been in discussions with Racing over the finer details of a transfer for over a week now.
An official statement on RealMadrid.com read:
“Real Madrid C.F. and Racing de Santander have reached an agreement for the transfer of the player Sergio Canales Madrazo.
The contract, which will link the player to Real Madrid CF over the next six seasons, will come into force from July 1, 2010.”
Madrid daily Marca reports that the deal is worth €5 million and Canales will join up with the Blancos for pre-season training before returning to Racing where he will spend next season on loan.
However, if Real are suitably impressed with the midfielder during pre-season training, they have the option to cancel the loan agreement in return for an additional fee.
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