Real Madrid will include a retractable roof as part of the revamped Santiago Bernabéu, after finally reaching an agreement with the city to refashion the stadium.

Madrid’s president, Florentino Pérez, said the project will cost €400m and construction is expected to start next year.

“We will see a dramatic transformation of the Santiago Bernabéu,” Pérez said. “This stadium is one of the emblematic icons of our city and we want to make it one of the best stadiums in the world and the undisputed symbol of the strength of our capital.

“With this agreement we will start a process of modernisation and transformation that will convert the stadium into an avant-garde architectural icon.”

“This stadium will act as an economic and touristic invigorator and will contribute to strengthening the image of our city.”

The venue originally opened in 1947 will maintain its capacity of more than 80,000, although the seating sections may be redesigned.

Perez said the Santiago Bernabéu will maintain its name, but it may gain a “surname” from a sponsor like at stadiums “everywhere in the world.”

Abu Dhabi investment fund International Petroleum Investment Company is helping finance the renovation which is expected to be completed in 2020.

New Bernabeu Real Madrid

Real Madrid president Florentino Perez stands in front of a model of the new-look Bernabeu.

Madrid have been trying to rebuild the stadium for several years but earlier, more commercially-minded projects were turned down by the city and court decisions. The new stadium deal was announced at an event with Madrid Mayor Manuela Carmena.

“This deal happened to promote the modernisation project of the stadium and to improve the urban environment around our beloved Bernabéu,” Carmena said.

In March, arch-rivals Barcelona announced their own remodelling project for the Camp Nou, increasing capacity from 99,354 to 105,000 after construction is fully finished in about five years.