The defender has been a revelation in the Premier League since arriving in the summer of 2024 and leaves for £50 million - confirmed by the English side.
Bournemouth announced the deal on Saturday, 17th May, following speculation that the youngster was set to leave the club.
"AFC Bournemouth can confirm that defender Dean Huijsen will join Real Madrid following the conclusion of the 2024/25 season, with the Spanish side having activated a £50 million release clause," the club posted on their website.
"Everyone at AFC Bournemouth is looking forward to working with Dean for the remaining two games of the Premier League season, before he embarks on the next step of his career."
Huijsen joined Bournemouth in the summer of 2024 from Juventus and had developed tremendously over the past year, even earning his first senior international caps for Spain.
The 20-year-old has impressed throughout a strong campaign for the Cherries and will reportedly join Madrid alongside Liverpool's Trent Alexander-Arnold.
"Well, Huijsen is a great player, young, with a lot of potential, I think the signing is very good for Real Madrid," Real manager Carlo Ancelotti told reporters on Saturday.
Injuries to defenders have significantly impacted Real's season, and Ancelotti highlighted the importance of strengthening the backline.
"Last season, I don't think it was even thinkable because we had David Alaba's return in the squad, (Eder) Militao was doing well, (Dani) Carvajal was doing well, and throughout this season, these kinds of injuries have hurt us," he added.