Atletico Madrid bought Colombia striker Radamel Falcao from FC Porto on Friday in a Portuguese and club record transfer deal of 40 million ($57 million).
The Portuguese club said in a statement to the Lisbon stock exchange that the price tag could rise to 47 million ($67 million) depending on variable factors it did not specify.
Atletico said on its website that Falcao had agreed to a five-year contract and was scheduled to arrive in the Spanish capital to undergo the standard medical test later Friday.
Falcao - nicknamed "El Tigre" (The Tiger) - was a key player for Porto last season, scoring 34 goals to help it win four trophies, including the Portuguese title, in a 30-game unbeaten league run.
Falcao will step in to fill the role vacated by Argentina striker Sergio Aguero, who joined Manchester City in a 38 million pound ($62 million) deal last month.
The deal also comes with Atletico reportedly negotiating with Inter Milan over the possible transfer of Uruguay striker Diego Forlan, who was left out of the Spanish club's squad for Thursday's 2-0 Europa League victory over Guimaraes.
Falcao's signing was double the price of Atletico's previous highest transfer, when it paid Benfica 20 million ($29 million) for Portugal forward Simao Sabrosa.
The 25-year-old Falcao scored the only goal in the Europa League final in Dublin to set a record of 17 goals in Europe's second-tier competition. Chelsea were also reportedly interested in Falcao since coach Andres Villas-Boas coached the Colombian last season at Porto.
"(Porto) was my first step into Europe and it was impossible to have gone better," Falcao wrote on his official website. "At a time like this I can just feel extremely grateful to all for this unforgettable experience."
Porto paid Argentine club River Plate 3.93 million ($5.5 million) for Falcao in 2009.
Porto said it was also selling Portugal midfielder Ruben Micael to Atletico for 5 million ($7 million). Atletico said Micael agreed to a four-year deal and was set to be loaned out to Spanish club Zaragoza for the season.