Real Madrid have announced the signing of Mateo Kovacic from Internazionale on a six-year contract reportedly worth £22 million.
The Serie A outfit were reluctant sellers, with Inter manager Roberto Mancini admitting they had to balance their books due to financial fair play regulations.
Kovacic becomes Rafael Benitez's third signing since replacing Carlo Ancelotti at the helm during the off-season, and the Croatia international links up with compatriot Luka Modric at the Santiago Bernabeu.
The 21-year-old midfielder established himself as a regular under Mancini following his arrival from Dinamo Zagreb in January 2013, contributing eight goals in 44 appearances for the Nerazzurri in all competitions last term.
A statement on Los Blancos' official website read: "Real Madrid C. F. and Inter Milan have agreed to the transfer of Mateo Kovacic, he will remain at the club for the next six seasons.
"The player will be presented tomorrow, Wednesday 19 August at 1pm, in the presidential box at the Santiago Bernabeu, after undergoing a medical.
"Afterwards, Mateo Kovacic will step out onto the pitch at the Santiago Bernabeu for the first time wearing the Real Madrid shirt and talk to the media in the press room."