Bayern Munich midfielder Toni Kroos has agreed a €5 million-a-season deal with Real Madrid - but the midfielder will only move to the Bernabeu this summer, a year before his contract at the Allianz Arena expires, if the two European heavyweights reach an agreement over a fee.
Bundesliga champions Bayern Munich have, however, conceded that letting the Germany international leave the club for free in 12 months time makes no sense from a business perspective.
Kroos rejects United, Chelsea & Barca
Kroos is relishing the prospect of joining Real Madrid, and turned down three lucrative offers from Manchester United, Chelsea and Barcelona in order to say yes to the reigning European champions, according to Spanish newspaper Marca.
Chelsea offered the 24-year-old a staggering €8 million-a-year to come to Stamford Bridge; Manchester United were expected to secure the playmaker's services before the arrival of Louis van Gaal, while Barcelona were also weighing up a move.
Why is Kroos leaving Bayern Munich?
Bayern Munich have been at loggerheads with Kroos for most of the year. The midfielder wanted parity with the club's highest earners, which would have meant a significant pay increase on his current £70,000-a-week deal. However, the Bavarian outfit were not prepared to break their strict wage structure, even if it resulted in the club losing the services of one of their best players.
Kroos knew he could earn a much higher wage away from the Allianz Arena, but his decision to join Real Madrid indicates that his choice to leave his current employers is not one solely motivated by financial gain. Had that been the case, he would have surely agreed to join Chelsea.
Do Real Madrid need Kroos?
Real Madrid already possess some of the best midfielders on the planet. Luka Modric was exceptional last season, Sami Khedira is a terrific holding midfielder, while Xabi Alonso remains a very good player despite his advancing years. Isco is developing nicely and the best is yet to come from Asier Illarramendi, who endured a difficult debut campaign at the Bernabeu.
Modric, however, is the only one of the quintet who falls into the 'world-class' category. In order to build on last season's success in Europe - and make a stronger challenge for the La Liga title - Real Madrid boss Carlo Ancelotti knows that bolstering his midfield options with the acquisitions of another top-level star is important. And Kroos, it seems, ticks all the boxes.
Real Madrid to pay €25-30m for Kroos
It's believed that talks between Real Madrid and Bayern Munich are currently at an advanced stage, and that a fee of between €25 million and €30 million has been mooted.
For a player with one year left on his contract, this represents a good deal for all parties. Although Bayern Munich boss Pep Guardiola is unlikely to be impressed with losing a player he considers to be one of the best midfielders in his ranks.
Will Manchester United and Chelsea regret missing out on Kroos? To watch some of his best moments, click play on the video below...