Carlo Ancelotti says midfielder Casemiro wants a “new challenge” and to leave the club as Manchester United close in on a deal worth up to 70m euros (£59.2m) for the Brazilian.
Talks have progressed in recent days and United are confidenty the deal for the Brazil international, 30, will be completed in the next few days.
“The negotiations are ongoing right now, he is still our player but his will is to leave,” said Ancelotti.
“I have spoken with him. Casemiro, for what he has done and the person he is, we must respect that desire.”
The Italian added: “Casemiro wants a new challenge and we understand his feeling, I do not think there is a way back.”
United’s will pay an initial 60m euros (£50.7m) plus 10m euros (£8.5m) in add-ons in the deal for the player’s signature.
Casemiro has been with Real since 2013, winning three La Liga titles and five Champions Leagues and he would become one of the United’s top earners if he completes the move and would sign a four-year contract with the option of an additional year.
After talks to sign Juventus’ Adrien Rabiot collapsed over the player’s demands, United have turned their attention to Casemiro as they look to strengthen Erik ten Hag’s midfield.
He would arrive at United on a big salary in keeping with his status as one of 30 players nominated for this year’s Ballon D’Or, even if his Real Madrid’s place is under threat from new arrival Aurelien Tchouameni.
“Within the squad we have a replacement,” added Ancelotti. “Tchouameni has been signed for this position and at the moment he is one of the best midfielders on the market.
“There is also the option of [Toni] Kroos, who can play in this position, as he did the second year I was here. There is also [Eduardo] Camavinga.”
Casemiro spent a season away from the Bernabeu on loan at Portuguese side Porto in 2014-15 but returned to Spain the following season after Real activated his buy-back clause.
He has made 222 appearances for the Spanish giants and scored 24 goals.