The Spanish giants announced that the 19-year-old Ivory Coast international has signed a seven-year contract that will keep him at the club until June 2033.
In a statement, Real Madrid said: "Real Madrid and RB Leipzig have reached an agreement for the transfer of the player Yan Diomande, who will be tied to our club for the next seven seasons, until June 30, 2033."
While neither club revealed the financial details, reports said the deal is worth around 125 million euros, with a further 15 million euros in performance-related add-ons.
Diomande enjoyed an outstanding season in the Bundesliga after joining RB Leipzig from Leganes just a year ago. His impressive displays attracted interest from several of Europe's biggest clubs, including Liverpool and Paris Saint-Germain.
The young winger also enhanced his growing reputation at the 2026 FIFA World Cup, where he was one of the tournament's breakout stars for Ivory Coast. Selected by head coach Emerse Fae, Diomande started all four matches as the Elephants reached the knockout stage of a World Cup for the first time in their history.
He also made history in Ivory Coast's opening 1-0 win over Ecuador, becoming the country's youngest-ever World Cup player at 19 years and 212 days. His outstanding display earned him the Player of the Match award.
PSG had reportedly agreed personal terms with the winger, but negotiations with Leipzig had not been completed. Real Madrid then stepped in and secured both the player's agreement and a deal with the German club.
After his move was confirmed, Diomande spoke of his excitement at joining the 15-time European champions.
"Moving to Real Madrid is a childhood dream come true for me. This is a dream. I'm moving to Real Madrid to fulfil it," he said.
The young winger also looked ahead to the next stage of his career.
"Today, a new chapter begins. Today, I start a new journey. Thank you," he said.
Diomande also thanked RB Leipzig as he brought his spell in Germany to an end.
"Leaving is never easy, but I'm excited for what's ahead and I'll always look back on my time in Leipzig with immense pride. I want to thank everyone at Leipzig. Who knows? Maybe we will meet again in the Champions League."
Real Madrid's new signing is expected to feature during the club's pre-season preparations, with their next friendly set for Saturday against Ferencvaros in Budapest.
