Gareth joined from Southampton in May 2007 and during his six years with the Club made 203 appearances, scoring 55 goals
Chairman, Daniel Levy commented, "Gareth was a player we had absolutely no intention of selling as we look to build for the future. He is a player whose career we have fostered and developed and he was only a year into his new four year contract.
"Such has been the attention from Real Madrid and so great is Gareth's desire to join them, that we have taken the view that the player will not be sufficiently committed to our campaign in the current season.
"We have, therefore, with great reluctance, agreed to this sale and do so in the knowledge that we have an exceptionally strong squad to which we have added no fewer than seven top internationals. More importantly, we have an immense team spirit and a dressing room that is hungry for success.
"We wish Gareth all the best in the future and he shall always be welcome at the Lane."