The Madrid city government said on Monday it will pursue Real Madrid for 18.4 million euros in illegal state aid that the European Commission ordered the club to repay.
Real, Spanish champions Barcelona and other clubs were found to have received an 'unfair advantage' by the commission in July due to tax breaks and overpriced land deals.
'The city hall will establish the measures necessary to carry out the decision of the European Commission to recover the aid of 18.4 million euros granted to Real Madrid,' the local government said in a statement.
'At the start of September a two-month period given by Brussels to the city hall to present to the commission the total amount (total owed plus interest) to be recouped, a description of the measures adopted and the documents that show the club has been ordered to reimburse the aid will expire.'
The club agreed to sell a plot of land to Madrid's government in 1998, a transaction that eventually was not completed.
As compensation for failure to complete the deal, Real received 22.7 million euros from the state in 2011.
The value of the land at the time of the initial agreement in 1998 was just 595,000 euros.
The commission's investigation showed that Real Madrid were entitled to compensation of just 4.3 million euros, therefore obtaining an advantage of 18.4 million.
The club have already signalled their intention to appeal the Commission's ruling to the European Court of Justice.