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Kylian Mbappe will leave Paris Saint-Germain this summer.

Mbappe, out of contract in the summer, communicated his decision to Nasser Al-Khelaifi, the PSG president, on Tuesday.

PSG expect Mbappe to join Real Madrid at the end of the season once the terms of his exit are finalised.

The two parties still need to negotiate whether Mbappe will leave for a fee or sacrifice his own earnings. PSG have Mbappe’s word that he will never leave on a free transfer.

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It is understood PSG and Mbappe will formally announcement his exit in the coming months.

Real Madrid hold a long-term interest in the 25-year-old forward, who would have to take a pay cut to join the Spanish side, even though they are prepared to make him the highest-paid player in their history.

PSG turned down a €220m (£188m) offer for Mbappe from Real Madrid in August 2021. The forward then chose to sign a new three-year deal with PSG that expires this summer.

If Mbappe were to extend his deal by a further year, PSG would value him at €150m (£128m) in the upcoming transfer window. They accepted a €300m (£256m) from Saudi club Al Hilal last summer, which Mbappe turned down.

Mbappe’s departure will be the next step in PSG’s plan to move on from the individualistic Galacticos era, instead favouring a more youthful squad focused on the collective. This began when Neymar, Lionel Messi, Sergio Ramos and Marco Verratti were allowed to move on.

The departure of Mbappe, whose wages cost PSG €200m (£171m) per year, will free up funds for the club to replace their star player and it is understood there are already plans to make multiple signings this summer.

Warren Zaire-Emery, 17, and Bradley Barcola, 21, have kick-started PSG’s new project, with the French side boasting the youngest squad in the Champions League this season. Xavi Simons, 20, on loan at RB Leipzig, is another thought to be key to PSG’s future.

PSG are expected to offer renewals to Simons and Zaire-Emery, while Barcola signed from Lyon on a five-year deal in the summer.

‘Everyone at Real Madrid thinks Mbappe will join’

Spanish football expert Alvaro Montero:

“Inside the club, everyone is positive, especially Florentino Perez and Jose Angel Sanchez. They are the ones who know what is going to happen. They believe in March or April that Mbappe will tell the club – not publicly – where he is going to play.

“Everybody inside the club believes he is going to play for Real Madrid but let’s see what happens, especially in the next weeks.

“At Real Madrid, the player that earns the most is on €24m [£20m] per year. Real, it has been reported, could offer him €25m [£21m] after tax, so around €50m [£43m] before tax.

“Inside Real Madrid they believe that the amount of money Kylian has earned in the last two or three years is down in part to the famous £200m bid Real Madrid made to sign him before he signed a contract extension at PSG.

“The club believe that the money he has earned, in part, is thanks to Real Madrid’s offer that was rejected by PSG.”