Atletico Madrid have agreed a deal to sign playmaker Diego on loan from Wolfsburg, the Bundesliga club announced.

The 26-year-old Brazilian international started his career with Santos before moving to Europe with Porto in 2004. He joined Werder Bremen in 2006, then spent the 2009/10 season in Italy with Juventus before returning to Germany with Wolfsburg.

Wolfsburg coach Felix Magath said on his club's website: "I'm convinced that Diego will play a key role in Madrid. I wish him all the best."

Meanwhile, Atletico confirmed the transfer of Brazil midfielder Elias Mendes to Sporting Lisbon. The 26-year-old international joined Atletico from Corinthians during last season's winter break and played 16 league and cup matches for the Spanish club.

Mendes has agreed a five-year contract with Sporting and will cost the Portuguese club just under €9 million.