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Jose Mourinho won the UEFA Champions League title last week at the helm of Inter Milan. ((Shaun Botterill/Getty Images))

Real Madrid finalized a deal to hire Jose Mourinho as coach Friday after reaching an agreement on compensation with Inter Milan.

The deal was announced after a meeting in Milan between Madrid president Florentino Perez and Inter counterpart Massimo Moratti.

Real Madrid said Mourinho will be officially introduced on Monday at the Santiago Bernabeu Stadium. He replaces Manuel Pelligrini, who was fired on Wednesday.

Italian sports daily Gazzetta dello Sport said Madrid will pay 16 million euros ($24.5 million Cdn) in compensation in two instalments.

Mourinho confirmed he wanted to join Madrid after Inter beat Bayern Munich 2-0 in the Spanish capital last Saturday to win the Champions League.

In two years with Inter, Mourinho led the club to two league titles, one Italian cup and its first European Cup since 1965. Before that, he led Chelsea to two Premier League titles. He also won the Champions League with Porto in 2004.

Despite having won nine European Cups, Madrid's last Champions League triumph came in 2002.

Last summer, Madrid spent large fees on Cristiano Ronaldo, Kaka and Karim Benzema. But the team failed to progress past the first knockout round of the Champions League.