A host of big-name clubs were linked to Canales, who has burst onto the scene this season with a series of eye-catching performances, but it appears it was Madrid who were always the teenager's top choice.
"He's had it very clear from the start, he wanted to play at Real Madrid," said Angel Canales, the player's father and representative.
"I never put my son up for auction as some have said. For me I was obliged to listen to all the clubs, simply out of courtesy. I've never asked for anything."
Angel Canales added in AS: "I have to admit that I've been surprised by the progress of Sergio. A few months ago he was playing in the Segunda Division B and now look at him. He's been fortunate to have scored some high-quality goals and that's what sells."