The Croatia midfielder, 26, arrived in Spain on Monday for a medical before signing a five-year deal.
Tottenham also confirmed a partnership deal with Real Madrid.
The agreement will see the two clubs working together in respect of players, coaching and commercial relationships.
Tottenham chairman Daniel Levy said: 'Luka has been a terrific player for us and, while we preferred not to part with him, we are pleased that it is to Real Madrid, a club with which we now look forward to sharing a long and productive partnership.'
Modric joined Tottenham in 2008 in a £16.5m deal from Dinamo Zagreb.
The playmaker made over 150 appearances for the London club, scoring 17 goals.
Aug. 27, 2012.
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