The 28-year-old Uruguay international has agreed a four-year contract with Atletico and moves from the Yellow Submarine in a deal worth approximately £14million.

Former Manchester United striker Forlan has spent the last three seasons with Villarreal and has been a regular scorer for the Spanish side.

His move paves the way for Atletico to sell Torres to Liverpool for a reported £26.5million.

Luis Garcia is set to move in the other direction as part of the deal. He was transferred to Liverpool three years ago for £6million but boss Rafa Benitez is willing to sell him for £4million to help push Torres' deal through.

Atletico fans have protested against the sale of Torres, but their major shareholder, Miguel Angel Gil Marin, said earlier in the week: "No one is irreplaceable.

"We have to build a competitive team and no one player, however good he is, can achieve our objectives on his own.

"Last time I spoke to Fernando he said he was staying but I can't prevent him having a change of heart and I have to be prepared for that."