"Real Madrid Football Club and our captain Karim Benzema have agreed to bring his brilliant and unforgettable time as a player at our club to a close. Real Madrid would like to show our gratitude and affection to the player who is already one of our greatest legends," the club said.
A farewell ceremony, which will be attended by the club's president, Florentino Perez, is scheduled to take place on June 6 at 12:00 p.m. local time (10:00 GMT), at Real Madrid Sport City.
"Karim Benzema's career at Real Madrid has been a shining example of conduct and professionalism, and he has represented the values of our club. Karim Benzema has earned the right to decide his future," Real Madrid said.
Media reported that on May 31, Saudi Al-Ittihad football club had offered Benzema a two-year contract worth a total of 200 million euros ($214 million).
Benzema has been a striker for Real Madrid since 2009, winning 24 trophies with the club, including four La Liga, three Copa del Rey and five UEFA Champions League titles.