Both Barca and Madrid have been linked with the Spain Under-21 midfielder who starred at this summer's European Championship.
Real Betis have already claimed that Barca have enquired about the 20-year-old, but it appears they will now have to watch him move to their rivals.
The report claims Ceballos has already agreed the move and will have a medical on Monday.
Madrid will pay €18 million for Ceballos, over his release clause, with the player set to receive a €3m signing-on fee.
Barca's search for reinforcements is in real need of a boost right now with the chase for Marco Verratti looking to have gone stone cold, while rumored interest in Hector Bellerin and Nelson Semedo has also gone quiet.
Instead we find the club continuing to be linked with Paulinho, while youngsters Jordi Mboula and Eric Garcia have departed for Monaco and Manchester City.
Josep Maria Bartomeu promised "big-name signings" recently but at the moment, there is little sign of that as we head towards pre-season