The 21-year-old has signed a five-year contract with the Spanish giants.
Real Madrid wrote on their Twitter: “Real Madrid C.F. & Málaga C. F. have reached an agreement for the transfer of Isco who will play for the Whites for the next 5 seasons.”
New Manchester City boss Manuel Pellegrini was keen to bring the youngster to Eastlands.
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The start of the 2017-18 Premier League season is just around the corner and is shaping up to be one of the most competitive yet.
As always it is the so called “big clubs” that have splashed the most cash in the transfer window so far this summer. Manchester United or City? Arsenal or Tottenham? Who are the winners and losers of the transfer window so far?