UEFA Champions League contenders Valencia CF have reached an agreement with Real Madrid CF to take midfielder Sergio Canales to Mestalla on a season-long loan deal.
Canales could join Valencia on a more long-term basis should the club exercise an option to sign him permanently.
The 20-year-old former UEFA European Under-17 Championship winner arrived at Madrid in July 2010 having impressed over two seasons at home-town club Real Racing Club, yet was limited to just ten Liga appearances for the Merengues last term.
"It's very satisfying to know that a club like Valencia are interested in me," said Canales, who is on duty with Spain at the FIFA U-20 World Cup in Colombia.
"I am filled with pride to be going there; it's where I wanted to play. The club is fighting for titles every year on domestic and international fronts. It's an important step for me and allows me to continue my progress. There is a great squad at Valencia and the possibilities are endless."
Valencia and Madrid both enter next season's UEFA Champions League at the group stage.
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