Kepa has been signed to provide temporary cover for Thibaut Courtois, whose season was curtailed last week following an anterior cruciate ligament injury in training.
The 28-year-old has made 163 appearances for Chelsea since joining from Athletic Bilbao in the summer of 2018. He remains the most expensive goalkeeper ever at £71m.
A statement on Real's official website said: "Real Madrid CF and Chelsea FC have agreed on the loan of the player Kepa Arrizabalaga, who is linked to the club this season, until June 30, 2024.
"In his five seasons at Chelsea, he has won one Champions League, one Club World Cup, one European Super Cup and one Europa League.
"This year, he has received the award for the best save in the Premier League for the 2022/2023 season.
"Kepa is an international with the Spanish team, with which he has been proclaimed champion of the 2023 Nations League. With Spain, he also won the U19 European Championship in 2012."
Reserve goalkeeper Andriy Lunin was in goal for Real Madrid's 2-0 win over Athletic Bilbao on Saturday.
