Real Madrid have confirmed the signing of Spanish U21 star Isco.

The 21-year-old joined Malaga from Valencia in 2011, going on to make 65 league starts for Los Boquerones, and has now sealed a move to the Bernabeu in a deal said to be worth around €27 million.

Real Madrid confirmed the capture of the talented youngster on a five-year contract in a statement on their website.

"Real Madrid incorporates a new project with one of the best Spanish football players.It read: 

"Francisco Roman Alarcon – Isco – plays at the Bernabéu for the next five seasons."

The 2012 'Golden Boy' winner had been a target for Manchester City and their new boss Manuel Pellegrini, who oversaw Isco's development at Malaga.

However the Citizens were forced to admit defeat in their pursuit of the young player make after Madrid president Florentino Perez revealed yesterday that the Spanish giants had a deal in place.

Speaking to national Spanish radio station RNE he said: "There is an agreement with the club [Malaga] and the player.

"Isco will be presented next week, all he needs is to overcome the medical examination."

Isco becomes new Madrid boss Carlo Ancelotti's first signing after the Italian was unveiled in Spain yesterday.

Manchester CIty are expected to set their sights on securing a new striker having missed out on Isco, with Carlos Tevez departing the etihad Stadium to join Juventus.

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