The Croatian was on loan at Chelsea last season and became a mainstay in their midfield as they captured the Europa League
Mateo Kovacic is set to sign for Chelsea on a permanent basis after they reportedly reached an agreement with Real Madrid.
The Blues have a two-window transfer ban looming, but are able to sign players who are on loan at the club because they are already registered.
With Chelsea failing to negotiate the option to buy the Croatian outright, Real are said to want in the region of £44million for him and while there is no confirmation of a fee, a deal has been reached, report The Telegraph.
Kovacic joined Real from Inter for a fee in the region of £25m in 2015, but found himself behind Luka Modric, Toni Kroos and Casemiro in the pecking order at the Bernabeu and decided to join the Blues on a season-long loan last summer.
A deal for Kovacic must be completed while he is still registered, with his loan deal expiring on Saturday.
It is a signing that makes sense considering Chelsea will be without Ruben Loftus-Cheek as a result of injury and Danny Drinkwater’s future is undecided, leaving them with just Ross Barkley, Jorginho and N’Golo Kante.
Former Chelsea manager Maurizio Sarri was a huge admirer of Kovacic, making him a mainstay of the midfield, where he played 32 times in the Premier League and a further 12 matches en route to capturing the Europa League at the expense of Arsenal.