Malaga midfielder has already agreed a move in principle to Spanish giants Real Madrid, according to Spanish team-mate Nacho Monreal.
The Arsenal defender was asked about Isco's future in an interview and he let it drop that the playmaker has already agreed to move to the Bernabeu despite high-interest from English Premier League side Manchester City.
Both City and Madrid are keen on signing Isco and both clubs are prepared to spend up to £30m for the Spaniard, but it seems that City have lost out on the race to sign the 21-year-old.
New City boss Manuel Pelligrini was very interested in bringing Isco with him from Malaga to the Etihad Stadium, but after speaking to his Spanish team-mates, they have advised him to stay in Spain and join Real Madrid instead.
It was first thought that Isco was going to be joining City as he felt he would get more first-team opportunities at the Etihad Stadium, but it now appears that he will be joining Real Madrid instead.
It is suggested that the midfielder was persuaded by Zinedine Zidane and also the soon-to-be-appointed manager Carlo Ancelotti to sign for Madrid instead of City and his Spaniard team-mate Nacho Monreal has revealed that a deal has been agreed already.
Monreal told Marca: "Isco has succeeded wherever he has gone. I believe he has already signed for Real Madrid and I'm sure he'll do very well because he is a great player.
"He may cost them, but together they will have opportunities and they will seize them."
The Arsenal left-back also spoke about the possibility of Gonzalo Higuain joining him at Arsenal and he admitted that he would love it.
He said: "I would love it. I always loved how he played for Real Madrid. He is a goalscorer and would be good reinforcement."
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