Alaba, who joined Real Madrid from Bayern Munich in 2021, has won two Champions Leagues and two La Liga titles with the club. However, his spell in the Spanish capital has been repeatedly disrupted by serious injuries: in late 2023, a cruciate ligament rupture sidelined him for over a year, and a subsequent meniscal tear kept him on the sidelines for much of the summer of 2025. As a result, Alaba has featured in only 15 competitive matches for the club this season.
Real Madrid said in a statement that they wished to "show their gratitude and affection to a player who was part of a team that shone during one of the most successful periods in our history." Club president Florentino Pérez added: "Real Madrid will always be his home."
The club will honour him with a farewell ceremony at the Bernabéu before Saturday's final home game against Athletic Bilbao, after which he will travel to the USA, Mexico and Canada to captain Austria at the World Cup (11 June–19 July).