Last summer, Mbappe was heavily linked with a switch from Monaco to the Bernabeu, but the youngster instead opted to sign for PSG, a club located in the city of his birth.
Mbappe has acknowledged that talks took place with the Spanish giants, but the France international has suggested that PSG were always his first choice.
The 19-year-old told Marca: "[I turned down Real Madrid] because PSG is the team of my city. "[Joining Real Madrid] would have been like a Real Madrid-supporting kid from Madrid having the chance to play for his team and deciding to go somewhere else, to another country.
"I wanted to play for PSG and I am very happy right now about how things are going. There were a lot of rumours about the transfers and it's true that we spoke, but I think that's now in the past for me and for Real Madrid. I now play for PSG and I will defend these colours 100%."
Mbappe is expected to feature in the PSG starting lineup when the Ligue 1 outfit face Real in the last 16 of the Champions League in February.