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The 16-year-old has been training in Madrid waiting for the switch from Manchester United to be completed.
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The teenager turned 16 in October which allows him to depart Old Trafford and sign for clubs abroad following his demand to leave last month.
Gabriel has not trained at Carrington since he walked out ahead of their Carabao Cup fixture with Brighton on September 16.
The youngster was due to receive his first team debut.
This was prior to his representatives demanding United should cancel his registration over a row about his playing time.
The youngster's representatives demanded that the teenager played at least 20 minutes in games against Sabah FK, Brighton and Bournemouth before beginning talks about signing a scholarship.
Despite several attempts by the Red Devils to reconcile the situation, Gabriel’s family were intent on him leaving Old Trafford.
Sources close to the situation believe Gabriel has an Irish passport, meaning he is eligible to join a club in the European Union as long as FIFA sanction the move and agree United have been suitably compensated.
As previously reported, that compensation could be as little as £300,000.
Gabriel has been training away from the club for the last few weeks.
talkSPORT understands that United have not had club to club contact with Real Madrid at this stage.
The Red Devils will consider legal action against any club who sign him while they still hold his registration, which is up at the end of the season.
A number of top clubs in the Premier League and Europe had been monitoring his situation.
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Chelsea had been keen to sign him, but it made the situation more complex to transfer to another club in England.
Barcelona, Bayern Munich and Paris Saint-Germain were among the clubs interested.
However, Real Madrid appear to have won the race for the talented teen.
One person who has seen the 16-year-old up close is Wayne Rooney.
Rooney's son, Kai, has played in the Man United academy with Gabriel.
Rooney himself admitted he was not shocked that Gabriel was wanting to leave Old Trafford.
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Speaking to talkSPORT, the United legend said: "With the JJ situation, I've seen him growing up, he's been in [my son] Kai's team, and I think, if I'm being honest, everyone has seen it coming.
"There's been a desire to maybe play abroad, maybe in Spain. We have to remember he's 15, he's still a kid. That's a lot of pressure and you hope that the decisions are being made for the right reasons.
"I actually listened to Michael Carrick talk about it after the Brighton game and I thought he spoke really well.
"It's such a big story with everything that's going on at Man United that you forget there's a kid involved here."