The La Liga giants will pay £64m to acquire the Portugal international before the European transfer window closes.
Fernandes has claimed that Sporting vetoed a deal with Spurs because the north Londoners did not meet the Portuguese outfit's asking price.
But the 24-year-old now looks set to swap the Estadio Jose Alvalade for the Santiago Bernabeu as Madrid prepare to complete the transfer.
Zinedine Zidane's side drew 2-2 with Villarreal this weekend, with Gareth Bale scoring twice before being sent off.
Get the best features, fun and footballing frolics straight to your inbox every week.
Thank you for signing up to Four Four Two. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.