Victorian sports minister Damian Drum revealed global superstars like FIFA Ballon d'Or winner Cristiano Ronaldo, Gareth Bale, James Rodriguez and Spanish internationals Iker Casillas and Sergio Ramos will head to Australia for the pre-season tournament in 2015.
Two further teams to take part are yet to be announced but one will be from the Premier League, with the other from the Serie A.
It is understood Manchester City and Inter are the other two clubs likely to join Real for the tournament, with an announcement set for the coming weeks.
The ICC will consist of three matches, all at the MCG, on July 18, 21 and 24 next year, with Drum revealing the event would generate around 50 million Australian dollars for the local economy.
Ex-Socceroos striker John Aloisi, who spent a large chunk of his career in Spain, was at the announcement and said having Real Madrid in Melbourne will be an incredible occasion.
"I got to play in Spain for six years and experience how big Real Madrid were," the former Osasuna and Alaves attacker said.
"They buy the biggest players in the world and make it work. Watching them live is another experience. I can't wait."
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