Alonso had been in charge of Bayer Leverkusen and confirmed he would be leaving the German club this month.
He had a contract at Leverkusen until 2026 but the club said they had granted his wish to terminate his deal.
Xabi Alonso has been appointed Real Madrid manager, the La Liga club said on Sunday as the Spaniard returns to the Santiago Bernabeu where he spent six seasons as a player and won several trophies.
Alonso has signed a three-year contract until June 2028 and the 43-year-old replaces Carlo Ancelotti, who took charge of his last game on Saturday.
