Inter Milan manager Roberto Mancini has confirmed Mateo Kovacic will join Real Madrid this summer.
The 21-year-old impressed for the Serie A outfit last season, which has seen him attract interest from top clubs across Europe. Italian news Tuttosport reported Liverpool were keen on securing the services of the Croatian international.
Inter have secured the services of midfielder Geoffrey Kondogbia and striker Stevan Jovetic this summer. The two are the high-profile signings by the former Manchester City manager.
The Daily Mail claims Kovacic will join the Spanish capital club on a £25m ($39.1m) deal. Mancini admitted his side were forced to allow Kovacic leave due to the Financial Fair Play regulations.
"What can you do? There are rules to respect. There is FFP and I don't think any of us wanted this but unfortunately we have to follow Uefa's impositions," Mancini told Mediaset Premium, as quoted by Goal.com.
"This doesn't mean we're not trying to make a team that can fight without him. We're all disappointed, from the president, to me, the directors and his team-mates.
"Both he and Shaqiri left for the same reason. But we'll do other things. We hope to take in players that suit us. We'll see what happens."
Kovacic was pulled out of Inter's friendly fixture with AEK Athens on Sunday, 16 August, as he is set to join Real in the ongoing transfer window. He will now join his compatriot Luke Modric at the Santiago Bernabeu.
The Croatian midfielder's move to Real will raise concern over Asier Illaramendi's future at the club as the latter has been linked with a move to Liverpool, according to the Daily Mail.
Meanwhile, Inter have won only two of their seven pre-season fixtures, which include four defeats. Mancini saw his side settle for a goalless draw against AEK Athens and despite their recent performances, the Italian manager remains upbeat about the new season.
"There were some difficulties, but that's normal. There were good things in the first half, we did better in defence, the defenders have improved by playing together," the Inter manager explained.