Danilo is one of the most sought-after right-backs in Europe Reuters

Real Madrid have completed the summer signing of Porto defender Danilo who will join the club after the end of the season.

"Real Madrid C. F. and FC Porto have reached an agreement over the transfer of Danilo, he will join the club next season and has a contract until 30 June 202," a statement on the Madrid official website read.

The Brazilian right back will compete with the likes of Dani Carvajal and Alvaro Arbeloa for a first-team spot, triggering speculation that either of these two stars could be on their way out of the club in the summer. The news comes as a major blow for Manchester United, who were heavily linked with a move for the player, in a bid to replace Rafael, who has fallen out of favour at the club.

The move comes days after the defender had publicly denied any talks of a transfer to Spain, affording some hope to United, who are desperately looking to strengthen their squad in the summer.

"The interest of the big clubs is very important to me, but I have not spoken to anyone and I know nothing of any offer from Real Madrid," he said in an interview.

"At the moment I think only about this season, then we'll talk about the future.

"I'm having a great time with Porto and I'm focused on the championship and Champions League with them," he added.

The Red Devils are likely to shift their attention to Southampton defender Nathaniel Clyne in the wake of the announcement, with Louis van Gaal expected to extend his stay with the 20-time Champions given their current form and the likelihood of securing a top four spot.

Danilo has secured nine goals for his national team and has scored four goals this term for Porto, who have progressed into the round of eight of the Champions League.