“We have reached an agreement in principle with Isco to become our third signing of the window,” the Andalusian side said in a statement.
“He has already arrived in Sevilla ahead of undergoing his medical tomorrow (Monday) and, should all go well, sign a two-year contract.”
Sevilla have recruited defenders Marcao from Galatasaray and Alex Telles on loan from Manchester United this summer.
Capped 38-times for Spain, Isco links up again with former Spain and Real Madrid coach Julen Lopetegui as he bids to reboot his career.
Isco joined Real Madrid from Malaga nine years ago for 30 million euros ($30.5m) and went on to win five Champions Leagues, three La Ligas and one Copa del Rey.
The 30-year-old made 353 appearances and played in four Champions League finals, including two as a starter, against Juventus in 2017 and Liverpool in 2018.
But Isco has been a fringe player in recent seasons and was not picked by Carlo Ancelotti to play a single minute of Real Madrid’s triumphant Champions League campaign last season.
Hampered by back problems he played just 17 games, three as a starter last season.