Jose Mourinho inched closer to a return to Chelsea after Real Madrid announced the departure of the Portuguese at the end of the season.

What has long been known and expected was finally confirmed by the Spanish club, with Mourinho now expected to seal his move to Stamford Bridge as Chelsea look to step up a gear in the summer transfer window in preparation for next season.

The La Liga still has two weekends remaining and Mourinho will bid goodbye to a three-year stay at Real Madrid once he takes charge in the final two games at Real Sociedad on May 26 and against Osasuna on June 2 at the Bernabeu.

"I want to inform you all that, after speaking to Jose Mourinho, we have decided to terminate his contract at the end of this season," Real Madrid president Florentino Perez told reporters at a press conference which was called late in the evening by the club on Monday. "We both agree that this is the right time.

"It is a sad day, but I wish Mourinho the best. This club will always remember him, he forms part of our history.

"Mourinho has spent more time at this club than any other coach has at the 20 clubs in the Primera Division, which shows it is not easy to last at a club for three years, especially at a club where there is as much pressure as this one.

"Each coach has his own personality, but you cannot doubt his competitive attitude. Has he made mistakes on the odd occasion? Of course, but the level of pressure at this club is not normal.

"On behalf of the board of directors, I would like to thank Jose Mourinho for the work he has done. We have taken an important step forward in a sporting and competitive sense under him, and we wish him luck in the future."

Mourinho had a tumultuous time of it at Real, with issues cropping up with both the board members and some of the players, especially skipper Iker Casillas.

So, it was just a matter of time before the Portuguese would leave, but having signed a new contract only last year, after Real Madrid won the La Liga title in record-breaking style, the main glitch was thought to be the compensation for either side.

That seems to have been sorted now with Perez confirming Mourinho would not be receiving any compensation from the club.

"No-one has been sacked, no-one has quit, it was a mutual agreement," Perez said.

"It's not an ideal situation that he is leaving, but after three years we both agree it was the right time to end this relationship.

"He believes the best thing is if he leaves the club and I share his reasons. It's the right decision to start a new project."

The jury is still out on whether Mourinho's three-year reign at Real was a successful one or not, with the Portuguese only managing a La Liga title and the Copa Del Rey with a team that is one of the most expensively assembled.

Real did reach the Champions League semifinals on three occasions, after failing to get past the las-16 stage quite a few times before that, but failed to get past the last-four mark, with the latest exit coming at the hands of Borussia Dortmund.

"Everything is related to where we came from," Perez said. "We had been eliminated in the last 16 of the Champions League for six years and were not seeded.

"Now we are among the top four teams in Europe, always in the semi-finals or finals. The overall picture is positive.

"If you asked all the clubs in Europe if they'd be satisfied to reach the Champions League semi-finals three years in a row, they'd say yes. For us, it's not enough, because of what we demand. We are always obliged to improve ourselves."

"Right now the club is in the position it should be in. The word failure is not fair, you now need to get 100 points to win this league.

"Last year we were delighted with ourselves, we were playing spectacular football and beat every record.

"This year it has not been enough for us to get to the semi-finals of the Champions League, the final of the Copa Del Rey and coming second in the league. That is what makes Madrid such a great club, we are very demanding, our culture is winning."

Carlo Ancelotti is the favorite to take over at the Bernabeu, although PSG are adamant on holding onto the Italian for at least another season.

Mourinho, meanwhile, will be licking his lips at the prospect of a return to the English Premier League, where he enjoyed so much success and garnered so much attention during his stint with Chelsea between 2004-07.