Tottenham is set to move for Houssem Aouar after Arsenal secured the signing of Martin Odegaard instead.
The Gunners have been chasing the Frenchman since last summer when they had a few bids for his signature rejected by Lyon.
He has two more seasons left on his current deal and their asking price for his signature has now been reduced.
Arsenal had remained interested in signing him this summer, but it was only as an alternative to signing Odegaard.
The Norwegian spent the second half of last season with the Gunners and he quickly became a fans favourite.
The Gunners hoped Madrid would make him available for a transfer and that has happened.
They have now completed his signing and that effectively ends their pursuit of Aouar and hands Tottenham the chance to sign the France international, according to The Daily Mail.
Nuno Espirito Santo started his reign brightly as Spurs beat Manchester City last weekend, although they lost their second game of the season in the Europa Conference League last night.
Adding Aouar to their midfield will give the new manager more options, but an overly big squad could also pose a problem for him.
