After 16 seasons and 228 goals, Raul has bid an emotional farewell to Real Madrid.
The immensely popular Madrid captain, a three-time Champions League winner and the club's all-time leading goal scorer, was expected to announce his departure after playing only a bit-part role last season.
Speaking at a press conference at the Santiago Bernabeu on Monday, the 33-year-old said he would always remain loyal to Los Blancos for giving him his start 16 years ago.
"It's a hard day for me," Raul said.
"I feel like a footballer still and I will keep on playing, but I will always be loyal to Real Madrid. I have tried to give everything in my time here."
After earlier being linked to Tottenham, Raul is now expected to sign a two-year deal with Bundesliga club Schalke.
"A new period starts today," he said.
"I have been happy at Real Madrid and I will always be willing to help the club in whatever it needs."
Madrid president Florentino Perez paid tribute to the departing icon.
"We will never forget Raul," he said.
"There are many men who form part of the legend of Real Madrid, but few that are chosen to embody the club - Raul is one of those."
Over 16 years Raul has scored 323 times in 741 games in all competitions, including 44 in 102 appearances for Spain. His 66 goals in the Champions League remains the benchmark for the European competition.
Tottenham manager Harry Redknapp had earlier ruled out a play for Raul, insisting any deal for Madrid star would most likely be out of the club's reach.
Redknapp revealed he had identified the three players he wants to target ahead of the Spurs' Champions League campaign, and again admitted his admiration for Sevilla striker Luis Fabiano.
"Raul is a great player at Real Madrid, but I wouldn't think he would be a player we would bring to Tottenham," he told Sky Sports News.
"Financially, I don't think it would be possible to do a deal like that."
"I like Fabiano. I've got other targets, but I'd be a liar if I said I didn't like him, he's a top player."
"We're certainly not the poor relations to anybody. We're well off, the club's well run and we're in good shape."
"We need three players and I know the three players we want. If we can get them I think we'll be good next year."
"We've still got work to do. There are a couple of positions where we could just make ourselves that extra little bit better."