The Brazilian wizard has been targeted by Real for while, and the recent arrival of new chairman Florentino Perez further instigated the potential move.

Milan chief Galliani met with Perez on Wednesday, and it seems that an agreement was met to lure Kaka to the Bernabeu.

"Florentino Perez invited me to celebrate his nomination. We had lunch and spoke about Kaka. I don't deny it. Negotiations exist, but a deal has yet to be done," Galliani told Gazzetta dello Sport.

"Kaka has behaved well with us, he has never asked for any adjustments or contract extensions. He has been here six years winning all that there is to win.

"But we cannot allow ourselves to lose £70m. The reasons behind Kaka's departure would be economic. Real turnover almost double what we do."

New cycle

Galliani is aware that Milan fans won't easily swallow the departure of their favorite star, but the Rossoneri supremo conceded that the club have no choice.

"I hope that the fans understand the situation," he added.

"The Milan of Berlusconi has lived through four great cycles: that of Sacchi, that of Capello, the interregnum of Tabarez-Zaccheroni-Terim and the period of Ancelotti.

"We are starting again with a fifth cycle. There are negotiations for Kaka, but the other big players are unsellable. They are Pato, Pirlo and Seedorf."

Kaka rejected a £100million bid from Manchester City in the winter break, despite Milan's willingness to acquire the money.