The European champions are believed to have triggered the £7.9m release clause on the 27-year-old's previous contract and he has signed a six-year deal.
Navas will be presented to the club's fans at the Estadio Santiago Bernebeu on Tuesday after undergoing his medical.
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"Real Madrid C. F. and Levante U. D. have reached an agreement for the transfer of Keylor Navas, who has signed to the club for the next six seasons." read the club's statement.
The goalkeeper was a standout member of his country's squad at the 2014 Fifa World Cup in Brazil, where they reached the quarter-finals for the first time.
He is the third player to join the Los Blancos this summer, following in the same footstep as Toni Kroos, who joined from Bayern Munich after winning the World Cup with Germany, and another World Cup star James Rodriguez of Colombia.
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