The 19-year-old winger left RB Leipzig's training camp on Wednesday and is travelling to Spain, according to Sky, with the two clubs having reached a breakthrough in fee negotiations after weeks of talks.
Real Madrid will pay a guaranteed €125m, rising to €140m with bonuses, for a player who only joined RB Leipzig from Spanish second-tier side Leganés last summer for around €20m. A medical, photoshoot and contract signing are the final steps before the move is completed, with Diomandé expected to sign a deal running until 2031.
The fee would make Diomandé the most expensive player in Real Madrid's history, surpassing the club's previous records for Jude Bellingham and Eden Hazard, and the second-most expensive sale in Bundesliga history behind only Ousmane Dembélé's move from Borussia Dortmund to Barcelona.
His rapid rise has been remarkable: two years ago he was playing at DME Academy in Daytona Beach, Florida, before a move to Leganés's reserves preceded a breakout season in the Bundesliga, in which he scored 12 goals and provided eight assists as Leipzig finished third.
He further enhanced his reputation at this year's World Cup, creating 11 chances in four appearances for Ivory Coast before their elimination by Norway in the round of 32, a display that drew Paris Saint-Germain into the race before Real Madrid ultimately won out.
The move has not been without complication behind the scenes, with a dispute over representation between Maxidel Management, who handled his switch from Leganés to Leipzig, and his newer advisers at Roc Nation reportedly still unresolved and expected to draw scrutiny from FIFA.
Leipzig, who signed Diomandé for around €20m only 12 months ago, will reinvest a significant portion of the world-record windfall into the next phase of head coach Martín Demichelis's rebuilding project, having initially hoped to convince the winger to extend his stay in Germany with an improved contract before his preference for the Bernabéu became clear.