The 21-year-old Serbia international striker has signed a five-year contract with the Spanish giants, which will earn him £43.7m (€50m) in total or £8.7m a year.
Frankfurt will pay Jovic's former club Benfica around £10.5m of the transfer fee.
The striker joined Frankfurt on loan from Benfica in the summer and last month the Bundesliga club exercised their option to make the move permanent.
Jovic has scored 17 goals in 31 Bundesliga appearances this season and 10 more in the Europa League, where Frankfurt lost to Chelsea on penalties in the semi-finals. Jovic would be the third new signing to join the Real Madrid squad next season after completing moves for FC Porto's defender Eder Militao, and Santos' Rodrygo.
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