The France international will finally be heading to the Spanish capital this summer as the Emir of Qatar and Madrid president Florentino Perez have agreed on a €250 million deal.
The deal also includes a €50 million in bonuses for the Frenchman.
The French League 1 champions have decided to sell Mbappe after the 2018 World Cup winner informed them he would not be extending his contract.
La Liga giants have been in pursuit of the French attacker ever since he burst onto the scene at AS Monaco.
Los Blancos have since made attempts to lure him away from the Parc des Princes after he joined PSG in 2018 for €180 million.
They were expected to sign Mbappe last year when his previous contract was expiring.