Brazilian midfielder Casemiro heads back to the Bernabeu, in what has proven to be a costly operation for Real Madrid.
The brief announcement read: "Real Madrid C.F. has exercised the option to salvage federative rights on the player Casemiro, after FC Porto stated that his buy back clause had been activated."
Casemiro signed on loan for FC Porto for a fee of €1 million, with the Portuguese club retaining an option to make the move permanent for €15 million. However, Real Madrid also retained a buy back clause of €7.5 million, enabling them to annul that deal.
Although FC Porto had signalled their intentions to keep the player, they will undoubtedly take some comfort in the significant profit they have made, because of the compensation agreement in place.
The 23-year-old Brazilian has clearly done enough to impress new Real Madrid boss, Rafa Benitez, during his spell in Portugual, becoming the first signing of his managerial tenure at the Bernabeu.
Real Madrid originally signed Casemiro from Sao Paulo FC, but after a spell in the B team, he only made a total of five starts, amongst 26 first-team outings.
With FC Porto last season, he proved to be a key figure for manager Julen Lopetegui, with 40 appearances in all competitions. All but two of those were in the starting eleven.