The Real official web site stated that a five-year-deal has been agreed to land the 24-year-old center-half, who is set to join the Royal club immediately.

Pepe is the second center-half to arrive at Santiago Bernabeu this summer, following the signing of Germany's Christoph Metzelder last week.

The move comes one day after Los Blancos announced the appointment of Bernd Schuster as the club's new manager, succeeding Fabio Capello.