The 34-year-old right-back joined the academy in 2002 and spent 13 seasons in the first team, making 450 appearances and contributing 14 goals and 65 assists. He departs having won 27 major titles including six Champions League trophies, six Club World Cups, four La Liga titles, two Copa del Rey and a European Championship with Spain in 2024.
Real Madrid's official statement framed his departure as a moment of deep institutional significance.
"Real Madrid wishes to express its gratitude and affection to one of the greatest legends of our club and world football. Carvajal is among only five players in the history of football to have won six European Cups, and he was part of a team that experienced one of the most brilliant eras in our history."
President Florentino Pérez added: "Dani Carvajal is a legend and a symbol of Real Madrid and its youth academy. His image together with our beloved Alfredo Di Stéfano laying the first stone of Real Madrid City will forever remain in the hearts of all Madridistas and in the history of our club. He has always represented the values of Real Madrid in an exemplary way. This is and always will be his home."
Carvajal spent one season on loan at Bayer Leverkusen in 2012-13 before returning to Madrid. His playing time fell significantly this season following the arrival of Trent Alexander-Arnold, restricting him to 22 appearances across all competitions. He was also left out of Spain's preliminary World Cup squad.
The Santiago Bernabéu will pay tribute to Carvajal at Saturday's final La Liga match of the season against Athletic Club. Saudi Arabia and the MLS are among the destinations linked with him for next season.