The 21-year-old is set to join Kaka and Cristiano Ronaldo in signing a six-year contract at the Bernabeu after his French employers agreed to a £29.7m approach from Madrid, who with this deal will see their summer spending spree pass the £170m mark.

The fee could yet rise to £34.8m dependent on performance clauses.

A statement posted on Madrid's official website last night said: "Real Madrid CF and Olympique Lyonnais have reached an agreement for the transfer of Karim Benzema, contingent upon the player's medical examination and the signing of his contracts.

"The 21-year-old striker will sign a six-year contract with Real Madrid."

Benzema will become Florentino Perez's fourth signing since returning to the Madrid presidency a month ago, following the arrivals of Kaka, Ronaldo and Raul Albiol.

Madrid and Manchester United had been vying for the services of Benzema.

The France forward came through the ranks at Lyon and burst onto the scene in the 2007-2008 season with 31 goals in 51 games.

The last campaign was less impressive for both club and player, as Lyon ended the season without the Ligue One title for the first time in eight years, but Benzema nevertheless scored 23 goals in all competitions – an average of a goal every other game.