The France striker, who had completed his medical earlier on Tuesday morning, signed a five-year contract and was handed a No. 9 shirt by club president Florentino Perez.
“Wow,” Mbappe said in Spanish to thousands of fans gathered at the Santiago Bernabeu Stadium.
“For years I’ve dreamed of playing for Real Madrid and today my dream has come true,” said the 25-year-old former Paris Saint-Germain player.
“I’m a happy boy. I’m going to give my life for this club,” he added.
Although his new teammates began training on Monday, the striker, who captained France during the Euros, will have a few more days off before kicking off his season in the Spanish capital.
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