Isco was officialy unveiled by Real on Wednesday to the club's fans after arriving from Malaga in a five-year deal.
The 21-year-old was strongly linked with a move to Manchester City with Manuel Pellegrini keen to be reunited with the playmaker having worked with him at Malaga.
However, Isco snubbed their overtures to join Real in a €27million (£23million) deal and although he was tempted to move to the City he conceded the lure of the Spanish giants was just too much.
"I have few doubts about coming here, because although I knew that Pellegrini wanted me, once I learned that Real Madrid's interest was serious I didn't think twice," said Isco.
"I had offers from other teams in Europe but its impossible to say no to Madrid, it's a dream for me to play here and here I am."
Isco admits he is relishing the challenge to win a place in Carlo Ancelotti's star-studded squad.
"Winning a place in the best team in the world is very difficult and match time here doesn't come for free, but I hope with hard work I will win my place my team," added Isco.
"There needs to be a lot of competition in every great team, it's a good sign, and I've come here to find my way into the team and win many things."