Bayern Munich have signed Lucas Hernandez from Atlético Madrid for a fee understood to be a club record €80m (£68m).

The 23-year-old defender, who was part of France’s World Cup-winning squad in Russia last summer, has signed a five-year deal with the German champions and will become the most expensive player in Bundesliga history. However, he will require surgery after a medical revealed ligament damage in his right knee but is expected to be fit for next season.

“I’m very happy that in Lucas Hernandez we’ve been able to sign one of the best defensive players in the world,” said the Bayern sporting director, Hasan Salihamidzic. “Lucas can be used in central defence and on the left. He will also continue our tradition of outstanding French players and strengthen our team.”

Hernandez, who will link up with France teammate Benjamin Pavard at Bayern following his transfer from VfB Stuttgart, joined Atlético at the age of 11 but admitted he was delighted to make the move after months of negotiations.

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“Today’s a very important day in my career,” he said. “Bayern Munich is one of the best clubs in Europe and the world. I’m proud to be able to fight for every title with Bayern in the future. I’d like to thank Atlético for a wonderful 12 years. Atlético will always be a part of me. Now I’m happy that I’m taking the next step at Bayern.”

An ageing squad and the defeat by Liverpool in the Champions League last 16 – the first time since 2011 Bayern failed to reach the quarter-finals – has convinced Bayern’s hierarchy of the need to rebuild.

With Arjen Robben and Franck Ribéry set to leave, they remain interested in Chelsea’s Callum Hudson-Odoi despite having a £35m bid rejected in January. It is understood Chelsea are determined not to allow the 18-year-old forward to leave but he has refused to sign an extension to his contract that expires in 2020.