Real Madrid have reached an "agreement in principle" to pay Monaco up to €180m (£161m) for Kylian Mbappé, according to reports in the Spanish capital.

The transfer, should it be completed, would become a world record, eclipsing the £89m fee paid by Manchester United for Paul Pogba last summer.

Madrid have agreed to pay €160m plus another €20m in performance-related bonuses for the 18-year-old striker, Marca report, though Monaco say that as yet they have not agreed a sale.

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Mbappé would be expected to sign a six-year deal at the Santiago Bernabeu where he would earn nearly £200k per week after tax.

Monaco had been holding out for €190m and had threatened to report Mbappé's suitors to Fifa for unauthorised contact with the player.

But Real Madrid sat down with the Ligue 1 champions last week and began negotiations over a price as Florentino Perez continues to buy up the best young talent in Europe.

Should the deal be completed, Monaco will have made an unprecedented £300m in transfer fees this summer.

Manchester City, Liverpool and Arsenal all had interest in the French teenager but it was clear from the beginning of the off-season that, were he to leave Monte Carlo, it would be for Madrid.

How Real Madrid could line up next season Show all 12 1 /12 How Real Madrid could line up next season How Real Madrid could line up next season How will Real Madrid line up next season? Real Madrid have assembled one of the most star-studded squads in world football. But how will Zinedine Zidane juggle his options? Getty How Real Madrid could line up next season GK: Keylor Navas The Costa Rican has held off allcomers - namely David De Gea - and has proven himself worthy of the No.1 jersey at the Bernabeu AFP/Getty Images How Real Madrid could line up next season RB: Daniel Carvajal The Spaniard has cemented his place at right back and is one of the most consistent in his position in the world game AFP/Getty Images How Real Madrid could line up next season CB: Sergio Ramos Like him or loathe him, you simply cannot ignore him. He's not the defender he once was but should you need a goal in a big moment, Sergio is still so often your man Getty How Real Madrid could line up next season CB: Raphael Varane The Frenchman is Ramos' first-choice partner and while he hasn't yet reached his sky-high potential is still one of the best central defenders around AFP/Getty Images How Real Madrid could line up next season LB: Marcelo The Brazilian showed during Real's run to defending their Champions League crown just how good he still is. A class act Getty How Real Madrid could line up next season DM: Casemiro The unsung hero of the side Casemiro does all the hard work behind the scenes. He has proven key to Real's fortunes since breaking into the first XI and has never looked back AFP/Getty Images How Real Madrid could line up next season CM: Luka Modric The Croatian remains one of the finest central midfielders in the game and walks into the side despite pressure from numerous other options Getty How Real Madrid could line up next season CM: Toni Kroos Like Modric Kroos is a master of his craft and remains undroppable AFP/Getty Images How Real Madrid could line up next season RM: Isco The Spaniard was sensational down the stretch last term and forced Gareth Bale into settling for a spot on the bench. Should he hit the ground running it's his spot to lose AFP/Getty Images How Real Madrid could line up next season LM: Cristiano Ronaldo The high-profile investigation into his tax affairs threatened to see the reigning Ballon d'Or winner walk away from the Spanish capital, but it appears his mood has calmed and he is staying put. Still a force of nature Zidane will continue to build his team around him Getty How Real Madrid could line up next season ST: Kylian Mbappe Real have reportedly agreed a fee with Monaco for the French wonderkid that would make him the world's most expensive player. Worth it? Time will tell AFP/Getty Images

Mbappé is known to have made certain demands about playing time, but the departure of Alvaro Morata should ease his mind.