Arsenal have signed Martin Odegaard from Real Madrid. 

Odegaard, 22, spent last season on loan with the Premier League club and scored two goals in 20 appearances.

Sources told ESPN that the key breakthrough was Madrid's decision earlier this month to drop their asking price from €60 million to €45m.

"You've seen the numbers and what we did after Christmas when Martin was in the team and we had people like Emile, the team performed at a completely different level," manager Mikel Arteta said in a news conference on Friday.

"He's someone that we admire and he's still at the age in his career when the potential he has is still immense.

"He made us better, we needed more options, alternatives, creativity and players that can be morals for this football club. He is still a really young man, but he has huge experience in different clubs already.

"He has a unique talent based on the way we want to play so I'm delighted that the club has made an effort and we have Martin on a permanent deal here."