Gravesen, 30, has the option of a further year with the Scottish champion. BRitish reports said the transfer fee was two million pounds ($4.2 million Cdn).

``I know other Danish players who have had the opportunity to play with Celtic and they have nothing but great things to say about the club,'' Gravesen said. ``I have also visited Celtic Park for matches, where the atmosphere is tremendous and I am very much looking forward to playing there.''

Gravesen joined Madrid from English club Everton in January 2005, but struggled to establish himself in the first team. His future at the club was further put in doubt when he was involved in a training ground scuffle with teammate Robinho during Madrid's pre-season tour of Austria.

``He is a player with great ability, experience and character _ qualities which could enhance any team,'' Celtic manager Gordon Strachan said.