Los Merengues were reportedly chasing the Frenchman in late, and manager Juande Ramos admitted interest in the 23-year-old.

Diarra is now set to open talks with Real over the prospected transfer, ahead of the January transfer window.

"We have always said that we would only allow our players to leave if we received an exceptional bid," a Portsmouth spokesman told the club's official website.

"We could not stand in the way of a move such as this for Lassana.

"It shows how far the club has come under the ownership of Alexandre Gaydamak when Real Madrid come in for one of our players.

"Should the deal be completed, the club has already identified possible replacements."

Dream Move

The former Arsenal and Chelsea man was delighted to get the opportunity of playing for the Primera Liga giants.

"When you talk about Real Madrid the other teams are no longer important, all the others take second place," he said earlier.

"It would be a dream to be able to play for such a large club."

Real are desperate to sign a midfielder after they lost Mahamadou Diarra until the rest of the season.