Kylian Mbappe has agreed to sign a new three-year contract with Paris Saint-Germain, rejecting interest from Real Madrid.

The 23-year-old's future had been one of the most talked-about transfer sagas ahead of the summer window, with his contract at the Parc des Princes set to expire on June 30.

PSG rejected a string of bids from Real Madrid last summer - the largest of which was understood to be worth around £189m - but were widely expected to lose their star man on a free transfer this year.

Madrid have been long-term admirers of the World Cup winner and were considered the front-runners for his signature as recently as this week.

However, Mbappe's mother revealed on Friday that he had reached an agreement on personal terms with both clubs and was considering a U-turn by staying at PSG after all.

The France international is now understood to have told PSG that he will sign a new three-year contract, keeping him at the club until 2025.

The paperwork is yet to be finalised, while official confirmation is not expected until after PSG's final game of the Ligue 1 season, which takes place against Metz this evening.

However, the deal is now thought to be set in stone, and could see Mbappe net as much as £4m per month in wages, as well as a signing-on fee of between £100m and £150m.

The forward reportedly spoke to Real Madrid president Florentino Perez on Saturday to confirm his decision, while Perez himself is understood to have informed his players that Mbappe would not be joining them next season.

The decision means that Champions League finalists Real Madrid have now missed out on their top two transfer targets for the summer, with Erling Braut Haaland set to join Manchester City.

Mbappe has once again been PSG's standout player this season, outperforming the likes of Lionel Messi and Neymar with 36 goals and 26 assists in 45 appearances across all competitions.

The prolific Paris-born striker leads the way in Ligue 1 for both goals and assists - boasting 25 and 19 respectively - and is now behind only Edinson Cavani in PSG's all-time scoring charts despite still being only 23.

Despite Mbappe's individual numbers, PSG have experienced a relatively disappointing campaign, winning the Ligue 1 title at a canter but suffering last-16 exits from both the Coupe de France and the Champions League - the latter at the hands of Real Madrid.

In total, since joining PSG on an initial loan deal from Monaco in 2017, Mbappe has scored 168 goals and created 87 more in 216 appearances across all competitions.

During that time, he has helped the club to 11 trophies, including four league titles.