The Croatian playmaker has been heavily linked with the Spanish champions in recent weeks but it appeared as though the move may have been off because the two clubs could not agree on a fee.
But more recent reports suggest that Modric have now come to terms with Madrid and a move is to be completed when Spurs agree a fee.
"Everything has been resolved. Luka and Real Madrid agree on everything," said a source close to the player.
"There is a little more difficulty with the position of Tottenham but everything will be solved and will be resolved quickly."