La Real are set to seal the deal for the Spaniard which will then allow their striker Willian Jose to join Wolverhampton Wanderers on a loan deal for the remainder of the campaign.
The deal to the Basque club is set to be processed for an initial €10m alongside a further €2m in add-ons.
Fernandez enjoyed a sterling 2019/20 campaign when he bagged 13 goals for Granada – helping the Andalusian club to qualify for European football for the first time in their history while also reaching the semi-finals of the Copa del Rey.
The 24-year-old made a total of 19 first-team appearances for Sevilla but scored just twice – while he also enjoyed a prolific season with Deportivo La Coruna in 2018/19 in the Segunda.
Fernandez was part of the squad that won the Under-21 European Championships in the summer of 2019 but has not yet been involved in the national senior squad.