Goodbye, Madrid – hello, Los Angeles!

Sources close to Victoria and David Beckham have confirmed that the couple will move to L.A. later this year. "David has just signed the biggest deal in global sport history with the Galaxy soccer team," a Beckham business insider tells PEOPLE. "It is worth several hundred million dollars over five years. They will move after he finishes this season playing in Madrid."

Beckham has signed with the Los Angeles Galaxy team, which is owned by the Anschutz Entertainment Group. "They are very excited at the challenge. For David this means taking the game on to a new level. This is massive," says the source.

Beckham, 31, had been in crisis talks with his Spanish soccer bosses at Real Madrid over contract renewal. Although his fame is undeniable, his career has slumped in the last year: He lost the captain slot of the English team in this past summer's World Cup and is now spending more time on the Real Madrid bench.


"After discussing several options with my family and my business advisers I have decided to join (the) L.A. Galaxy and play in the MLS (Major League Soccer) from August," Beckham said in a statement released on his behalf.

"They both love Los Angeles. It will be good for their careers, they adore the lifestyle, the weather and it would be brilliant for their boys," a family friend tells PEOPLE.

The Beckham brand is huge across Europe, Asia and Africa and the couple has already laid the foundations for the American move. He has opened a soccer academy (www.thedavidbeckhamacademy.com) in California and registration for would-be members is due to open shortly, while 32-year-old Victoria continues to delve into the fashion world and recently directed a photo shoot in L.A. for close pal Katie Holmes.

The couple were at home in Spain when news started leaking about a deal being made. The hardest decision was actually to do with matters of the heart, according to a pal. The Beckhams are particularly close to Victoria's family, who regularly fly from England to Spain to babysit their three sons, Brooklyn 7, Romeo, 4, and Cruz, nearly 2.

"The negotiations were important but ultimately it is family that matters to both of them," a family friend tells PEOPLE. "When they move to L.A. her family will visit every few weeks. Her family can handle the regular flights to and from California but they have no intention of buying their own home near David and Victoria."