And with new Madrid president Florentino Perez willing to bankroll a £60.8million transfer, the player is expected to swap the San Siro for the Bernabeu when he returns from international duty early next week.

Chelsea were also reportedly interested but both they and Milan have denied any offer for the 27-year-old.

Milan general manager and vice-president Adriano Galliani said: "The Chelsea solution doesn't exist.

"Kaka will either go to Real or remain at Milan. That's his wish and we are doing everything in full agreement.

"We are in negotiations but no agreement has been reached yet."

Galliani admitted Madrid's offer for Kaka was too enticing to reject.

"Everyone has a heart but the numbers have become so high that even a big heart needs to consider those figures," he said. "We cannot allow ourselves to lose 70million euros per year.

"The reasons relating to a possible Kaka departure would be financial.

"Real Madrid have double the revenue of Milan. They own a stadium. They do not have to share TV rights with other teams.

"They benefit from a better fiscal climate which allows players to receive higher wages."

The player himself will make the final decision but Madrid are confident he will choose the Spanish capital in what could prove to be the first major signing of the summer, with Perez also talking up his chances of landing Manchester United winger Cristiano Ronaldo.

"Kaka, Cristiano Ronaldo and Lionel Messi are the best players in the world," Perez told Atena 3.

"I'm going to work to bring Kaka and Cristiano Ronaldo to Real Madrid.

"What would be very good is to see these great players at Real Madrid. Cristiano would be one of these."

News of Chelsea's withdrawal in the race for Kaka was well received at the Bernabeu with Perez admitting: "This statement is an advantage.

"If Chelsea are not competing with us it is good news.

"We have good relations with Milan. I'm a friend of Galliani which will make this agreement easier. Moreover, the player has shown his desire to play for us."

Losing Kaka would be a major setback for Milan, but Galliani tried to soften the blow by declaring the club's other stars not for sale.

He added: "I want to reassure the fans: we are not downsizing.

"There is a negotiation for Kaka, but the other big players, (Alexandre) Pato, (Andrea) Pirlo and (Clarence) Seedorf, are not for sale."

Galliani also confirmed the club would look to reshape an ageing squad this summer.

"It's not that we sell Kaka and don't sign anyone.

"If Kaka leaves, another great attacker will arrive. It will be a great attacker, just like Thiago Silva is a great defender who substitutes the immense Paolo Maldini.

"Everything that is done at Milan is considered. I hope the fans understand the situation."

Milan midfielder Gennaro Gattuso believes the departure of Kaka would be a significant blow to the club.

"I will await an official confirmation, but I am very sad," said Gattuso.

"We are talking about the departure of Kaka, who is not a common player, but a player that makes a team win."