Trent Alexander-Arnold is set to officially join Real Madrid on Sunday, June 1.
Liverpool agreed to release him earlier than his contract's original end date in return for a transfer fee.
As per multiple sources, Real Madrid has paid 10 million euros in one upfront payment to sign Alexander-Arnold before his contract ended.
However, Liverpool did not reveal the exact amount of money involved.
Real Madrid announced that Alexander-Arnold has signed a six-year contract with the club.
His new contract includes a very high buy-out clause of 1 billion euros, which is the amount another club would need to pay if they wanted to sign him before his contract ends.
FIFA has approved special transfer window from June 1 to June 10, allowing clubs to officially register new players early so they can play in the expanded Club World Cup, which starts on June 14 in the United States and will last for a month.
Alexander-Arnold is expected to make his first appearance for Real Madrid in their opening match of the Club World Cup against Al Hilal, scheduled for June 18 in Miami, Florida.
Alexander-Arnold end long Liverpool journey:
Earlier, Alexander-Arnold announced he will leave Liverpool, the club he has been with since he was a child at the end of the season.
Explaining the reason for not staying at the club, he shared, "I have never known anything else and this decision is about experiencing a new challenge, taking myself out of my comfort zone and pushing myself both professionally and personally."
The player joined Liverpool's youth team when he was just six years old.
Alexander-Arnold has played 354 matches for the club, scored 23 goals and 92 assists.
