Midfielder Mateo Kovacic's loan from Real Madrid will be converted to a permanent transfer by Chelsea for £40 million, despite the club's transfer ban, reports the BBC's Simon Stone.

Because the Croatia international is already registered by UEFA as a Chelsea player, as long as the deal is completed before June 30, Kovacic wouldn't require re-registration and any move wouldn't count as a new transfer.

Kovacic, 25, made 51 appearances across all competitions last season and helped Chelsea claim the Europa League title. He scored three times.

Prior to joining Real in 2015, Kovacic also spent time at Dinamo Zagreb and Inter.

Chelsea's two-window transfer ban for illegally using players under the age of 18 in their youth team without FIFA registration, as well as payments to third parties during transfer dealings.