Los Blancos are expecting to confirm the arrival of goalkeeper Kepa from Athletic Bilbao.
Florentino Perez had considered paying more than Kepa’s release clause to keep the relations with Bilbao good, but has now decided just to pay the required amount.
Kepa will join as Perez looks to overhaul his goalkeeper options with Kiko Casilla expected to depart.
Kepa will then be back up and competition for Keylor Navas, who is expected to be replaced next summer.
David de Gea, Thibaut Courtois and Jan Oblak are the front-runners for the No 1 shirt.
Athletic Bilbao had hoped to tie Kepa down to a new deal but talks are off and he will leave with just six months on his deal.
Madrid are ready to pay the £17m now to avoid a battle in the summer and to get one of the best prospects in Spanish football.
Kepa has been in Spain squads already and made his debut in November against Costa Rica.
He could go to the World Cup in the summer as Spain’s No 3.
Madrid have struggled domestically this season and Perez is keen to overhaul his side and will make big moves next month and in the summer.
He is expected to freshen up up front, at the back and in goal.