Inter Milan gave coach Jose Mourinho the green light to join Real Madrid after the two club presidents met in person on Friday to agree a compensation package.
Inter made the announcement in a statement on Friday, two days after Real announced they had sacked coach Manuel Pellegrini and would sign Mourinho as soon as they had done a deal with the Italians.
Inter gave no details of the agreement between their president Massimo Moratti and his Real counterpart Florentino Perez.
Spanish and Italian media reported that Inter would receive eight million euros ($9.80 million) in return for letting the Portuguese coach go before the end of his contract.
Mourinho led Inter to a treble of trophies last season, culminating in their Champions League final victory over Bayern Munich at Real's Bernabeu Stadium.
