Madrid will pay Bale the sum over the length of his contract, on top of his reported £86m transfer fee.
According to The Mirror, Bale winger will sign a six-year deal, earning £310,000 a week once he completes his move from Tottenham Hotspur.
Tax laws in Spain mean that the Welshman will take home £150,000 a week, making him the club's second highest earner after Cristiano Ronaldo.
Madrid will also insert a huge release clause in Bale's contract, similar to the £855m in Ronaldo's, to put off the likes of Paris Saint-Germain and Monaco in the future.
Bale could be unveiled on Tuesday after the Spanish giants erected the stage that they normally use for presenting new players.