Neymar, 19, is considered one of the brightest talents in world football having shone for his club Santos and also on the international stage for Brazil.
Indeed, Brazil legend Pele recently expressed his belief that the winger has the potential to rival Barcelona star Lionel Messi as one of football's most talented players.
Neymar was strongly linked with a move away from Santos in the summer, with Real, Barcelona and Chelsea suggested as potential suitors, but a move failed to materialise.
However, the Brazilian said in September he hopes interest in his signature will be renewed after next summer's London 2012 Olympics, and ESPNsoccernet understands a £53 million deal is in place to bring him to the Bernabeu.
A source said: "Neymar will be a Real Madrid player in July, but he is not going there any earlier. He has not signed a contract as yet."
Neymar is expected to join Real on a contract worth £1 million-a-month, while image rights, commercial agreements and the transfer fee could see the deal total around £150 million.
Santos are yet to agree a release date for the sale of Neymar, but it is anticipated his switch to Real will go through next summer, despite interest from elsewhere, including Premier League side Chelsea, who have reportedly been priced out of a deal.
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