Chelsea have pulled off an incredible transfer coup by agreeing an initial fee of £58million with Real Madrid for Alvaro Morata.

In a statement on their website on Wednesday night, Chelsea confirmed Telegraph Sport’s earlier report that a deal with Madrid has been agreed and Morata will now discuss personal terms and undergo a medical.

Chelsea did not reveal the size of the fee, but Telegraph Sport understands the Premier League champions will pay an initial £58m before add-ons.

That is almost £20m less than the initial £75m Manchester United paid for Romelu Lukaku, who had been Chelsea’s top target.

Sources close to the deal believe Chelsea have struck a superb deal for Spain international Morata in the current transfer market, where fees have spiralled out of control.

Morata had agreed a deal to join Manchester United credit: Reuters

The £58m will still eclipse Chelsea’s previous record spend of £50m on Fernando Torres in 2011. It is believed the add-ons could see the final fee for Morata rise towards £70m if Chelsea achieve their targets with him.

Morata travelled with Real for their US tour, but will now break away from that to discuss personal terms with Chelsea and undergo a medial.

Having initially left their options open following their failure to land Lukaku, the Blues made a breakthrough in negotiations with Real over Morata on Wednesday and hope to conclude the deal swiftly.

The 24-year-old has been keen on the prospect of working with Conte at Chelsea since the Blues tried to sign him last summer.

"I am very happy, God willing, tomorrow I will be at Chelsea, a club that has always wanted me," Morata told Spanish newspaper Marca on Wednesday night.

"I'm not disappointed about anything, I've won four titles here [with Real Madrid], but now I only think of putting on the Chelsea shirt.

"I want to grow up, if I didn't I wouldn't have left. I'd like to thank Zidane and wish him luck for the upcoming season.

View more!

Morata scored 15 La Liga goals for Real last season, but wants to move to become the number one striker after acting as back-up to Cristiano Ronaldo and Gareth Bale.

He had agreed to join United, but they instead hijacked Chelsea’s interest in Lukaku which left Morata in limbo.

The arrival of Morata will be welcomed by several members of the Chelsea squad, who have become concerned at the precarious situation the club find themselves in.

Chelsea announced that head coach Antonio Conte had been rewarded for his fine first season with a pay rise, which underlined the commitment that the Italian will start this campaign in charge.

But the absence of any extension means there remains no long-term guarantees over Conte’s future, which has prompted speculation among players that he might only be in charge for a further 12 months at most.

There was also some dismay that Chelsea left for their pre-season tour of China and Singapore without any significant new signings in the squad and Diego Costa and Nemanja Matic left behind.

Defender Antonio Rudiger could meet up with the Chelsea squad in Singapore after his holiday, but midfielder Tiemoue Bakayoko will continue his recovery from injury at the club’s Cobham training ground.

Chelsea were keen on Real Madrid right-back Danilo credit: Getty images

Clinching the signature of Morata will certainly improve the mood within the squad and among Chelsea’s fans.

With Real right-back Danilo, who Conte had been keen to sign, set to move to Manchester City, Chelsea will try again to reach an agreement with Juventus over left-back Alex Sandro.

Negotiations have been slow regarding Sandro, despite Chelsea indicating a willingness to pay £60m for the Brazilian.

Italian sources have claimed the sale of Leonardo Bonucci means Juve will not sell Sandro and will instead offer him a new contract, but that has not yet put off Conte and Chelsea.

Juve’s interest in midfielder Nemanja Matic adds another dimension to Chelsea’s pursuit of Sandro.