Arsenal have completed the signing of midfielder Martin Odegaard from Real Madrid, the club announced on Friday.

Odegaard, 22, spent last season on loan with the Premier League club and scored two goals in 20 appearances.

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Odegaard returned to Spain this summer and attempted to break into Madrid's first team but was told by new manager Carlo Ancelotti that he would face competition for a regular place.

Sources told ESPN that the key breakthrough was Madrid's decision earlier this month to drop their asking price from €60 million to €45m.

Welcome høme, Martin Ødegaard ??? pic.twitter.com/OUlG9YGDKj

— Arsenal (@Arsenal) August 20, 2021

Arsenal needed to offload midfielder Joe Willock to Newcastle United in a deal worth £25m to help finance the Odegaard transfer and create space in the squad.

Odegaard becomes Arsenal's fourth signing this season after Ben White, Albert Sambi Lokonga and Nuno Tavares joined the club earlier this summer.

The club said in a statement that Odegaard, who will wear the No. 8 shirt, will not be available for Arsenal's upcoming Premier League clash against Chelsea on Sunday.