The 35-year-old had been expected to sign a new one-year contract with Real at the end of the current campaign. Later, though, he was offered €200 million over two years by Saudi Arabia's Pro League's defending champions, Al-Ittihad.
During a meeting with Real Madrid president Florentino Perez on Thursday, Karim Benzema broke the news that he was leaving the club. However, after 14 years in Madrid, the Frenchman had already decided to call it quits.
90min has learned from reliable sources that Benzema has opted to return for a second season at the Santiago Bernabeu after all.
Although Real were caught off guard by Benzema's departure, their transfer staff led by Juni Calafat was already working on prospective successors, with Harry Kane at the top of the list.
With Benzema off the team's radar, Real can focus on other matters, such as signing England international Jude Bellingham.