The Spanish club decided against a permanent deal to keep the 19 year-old at Real Madrid which has led to interest from Monaco.
Real Madrid rejected a permanent deal simply because of the return of Bayer Leverkusen right back Dani Carvajal who is expected to fill that void.
It is believed that Fabinho will join the outfit who has already purchased Joao Moutinho, James Rodriguez, Radamel Falcao, Ricardo Carvalho plus a few more.
Fabinho made a total of 30 appearances for Real Madrid's Castilla side scoring 2 goals. That form led to an appearance for the first team where he featured off the bench against Malaga and provided an assist in the 6-2 win.