Fee: Loan transfer
Valencia have secured the loan signing of Real Madrid midfielder Sergio Canales, both clubs have announced on their respective websites.
Neither side have so far disclosed the length of Canales' contract with Valencia, but according to a report in AS, the player has agreed to move to the Mestalla on loan until the summer of 2013.
Valencia have secured a purchase option for Canales, believed to be worth €12 million. Real Madrid, meanwhile, will be allowed to re-sign the midfielder during the two-year period which follows the player's potential transfer to the Mestalla for a fee reportedly between €15m-18m.
Quizzed on his new challenge, Canales told Valencia's website: "It is a great satisfaction that a club like Valencia have interest in me. I am really proud to join Valencia and this is where I wanted to play.
"They are a great club, who fight every year for the top on a national and an international level. Besides, this is a very important step that will allow me to continue in football's elite.
"I think we have every chance to fight for all the competitions and that the club have a great squad to do so."
Canales, 20, had a muted first season at the Santiago Bernabeu after signing for Jose Mourinho's from Racing Santander last summer in a reported €4.5m deal.
The midfielder, who made 15 appearances for Real Madrid last season, will complete a move to Valencia after the end of the Under-20 World Cup in Colombia.