Diomande returns to the Spanish capital after just a year away following his 2025 move to Germany from Real Madrid's capital city neighbours Leganes.
13 goals in 2025/26, plus a key role for the Ivory Coast at the 2026 FIFA World Cup saw Diomande's profile - and price tag - skyrocket as Los Blancos held off Liverpool and PSG in the race to sign him.
The final transfer fee could reach £120M (€140M) if certain add-ons are triggered as a huge profit on the €20M Leipzig paid for him just 12 months ago.
Diomande could now form part of a sensational forward line in Madrid - alongside Vinicus Junior and Kylian Mbappe - as the 19-year-old paid tribute to Leipzig's role in his development.
"I was able to establish myself in one of the best leagues in Europe, earn a place in the Ivory Coast national team, and represent my country on the biggest stage of all, the World Cup.
"None of this would have been possible without RB Leipzig, and for that, I will always be grateful.
"Signing for Real Madrid is a childhood dream come true.
"Leaving is never easy, but I'm excited for what comes next and I'll always remember my time in Leipzig with immense pride. Who knows? Perhaps we'll meet again someday in the Champions League."