The 22-year-old Spanish left-back, who played for Madrid's youth academy before joining Manchester United in 2020, is reported to have cost close to 50 million euros ($58 million).

"Real Madrid and Benfica have reached an agreement for the transfer of Alvaro Carreras, who will be under contract with our club for the next six seasons, until 30 June 2031," said Los Blancos in a statement.

The defender played 62 times for Benfica, scoring five goals for the club, including an initial loan spell before they signed him for six million euros from United in 2024.

Carreras becomes Madrid's fourth signing of a significant summer rebuild after Trent Alexander-Arnold, Dean Huijsen and Franco Mastantuono, at an estimated cost of around 170 million euros in transfer fees.

After finishing last season without a major trophy coach Carlo Ancelotti departed and was replaced by Xabi Alonso.

The Spaniard steered Madrid to the Club World Cup semi-finals but they were hammered 4-0 by runners-up Paris Saint-Germain.