Diario AS reports that Real Madrid's decision has been communicated to the player's representative Juanma López, with the club satisfied by Muñoz's progress but unwilling to integrate him into the first-team squad at this stage. The buyback option, which Madrid can activate for approximately €8m this summer — rising in value in each of the following two seasons — will remain untouched for now.
Muñoz joined Osasuna from Madrid for just €5m last July after making his Real Madrid first-team debut in 2024-25. He has since become one of La Liga's standout breakout performers, scoring 8 goals and contributing 4 assists across 36 appearances from the right flank, and earning his first Spain cap in March — scoring on his debut in a 3-0 friendly win over Serbia. His Transfermarkt valuation has risen from €10m to €20m in the space of five months.
The contractual structure of his sale is unusually favourable to Madrid. In addition to the €8m buyback clause — which can be exercised in any of the next three summers — the club retained a right of first refusal if another club triggers the player's €40m release clause, plus 50% of any future transfer fee.
Madrid are, in effect, positioned to benefit from Muñoz's continued development regardless of the path his career takes.
Osasuna sporting director Braulio Vázquez has been firm about the club's position on external interest.
"We won't even listen. We're sticking to the clause."
Sunderland had a verbal approach of around €25m rejected in January, with Osasuna pointing all interested parties directly to the €40m release figure. Tottenham Hotspur are also understood to have explored the possibility of triggering that clause.
Serie A and Premier League clubs have been in contact with Osasuna about the terms of his contract, and the club does not rule out receiving a formal offer close to €40m before the window closes.
If a third party does trigger the release clause, a complex regulatory situation arises. Madrid's right of first refusal would give them the opportunity to match any offer and take Muñoz back — but FIFA regulations prohibit two transfers of the same player within a 12-week period, meaning that if Madrid exercised that right, he could not then be immediately sold on. Any returning player would remain in the first-team squad until at least January.
For now that scenario is described as improbable. Madrid regard Muñoz as a significant asset — one they may retrieve in a future window — but the immediate priority is to continue the relationship with Osasuna on current terms, with two further years of the buyback window still available.