Arsenal have upped the ante when it comes to their pursuit of the Spanish star.
They and Tottenham both made attempts to sign the 22-year-old, but Arsenal have emerged victorious.
The £3m fee, coupled with Unai Emery’s willingness to offer first team football are seen as major pluses to Real Madrid.
Mauricio Pochettino meanwhile wasn’t prepared to entertain the deal without being granted the opportunity to make the move permanent in 12 months time, reports The Sun.
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Madrid are not prepared to let Ceballos leave full time, but cannot guarantee him the minutes he needs.
Thus a move to the Emirates looks like a beneficial one for both clubs and the player and the midfielder is now in London to undergo his medical.
Emery has had to be shrewd in the transfer market this summer given the minimal budget afforded to him.
Ceballos may be sign as a short-term solution to a long-term problem when it comes to recruiting, but Emery maintains his focus is signing players who can add quality to his Arsenal side.
“We are only signing players if we are convinced they will being different qualities to our squad and Ceballos is a very good player,” said Emery.
The Gunners are hoping for a return to the Champions League having narrowly missed out last term on Europe’s premier competition.
Emery has therefore recognised the need to add in a variety of areas, although the lack of funds has made that challenging.
The Spanish boss wants to add a central defender, full-back, central midfielder and winger.
William Saliba, a French centre-back, is close to move to London, although the deal will be finalised provided Saint-Etienne can retain his services on loan for another season.
Celtic’s Kieran Tierney is another of Emery’s top targets, but they are struggling to create an offer that is deemed sufficient by the Scottish champions.
Wilfried Zaha and Nicolas Pepe are also both linked with switches to north London, although their respective clubs look to have priced Arsenal out with asking prices exceeding £70m.