The Brazilian joined Porto in 2016 from Corinthians, winning the 2018 Portuguese league title and Super Cup, making 142 appearances for the club.
“FC Porto inform the markets that they have reached an agreement with Atletico Madrid for the playing rights of Felipe to the value of 20 million euros,” a club statement read.
Atletico, who have yet to comment on the matter, are set to welcome several new faces in the summer to replace outgoing defenders Diego Godin, Filipe Luis, Juanfran and Lucas Hernandez.
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Forward Antoine Griezmann is also set to depart after telling the club earlier this month he wanted to leave.
(Reporting by Joseph Cassinelli; Editing by Peter Rutherford)
