"We have dedicated the last few weeks to analysing and reflecting upon the past season. And we have decided to bring to an end Manuel Pellegrini's time at the club," said Perez.
"We want to thank him and his team for their hard work, professionalism and conduct.
"The board also agreed to contract Jose Mourinho as the new coach of Real Madrid once his contractual relationship with Inter Milan has been resolved."
Perez said, “I am ready to admit to some mistakes, but the hiring of Mourinho, one of the world’s best coaches, is an opportunity that this Real Madrid, which always fights for excellence, could not afford to miss. We are absolutely convinced that we need a fresh impulse and that a coach like Mourinho can be the person to take charge of the squad for the next few years."