Everton have confirmed that they will have to pay an initial fee of £600,000 to Leeds for 16-year-old defender Luke Garbutt.
The tribunal held yesterday came to the decision on compensation for the England Youth international, who joined Everton earlier in the summer.
The fee could rise to over £1.5m due to various add-ons including appearances, honours and international caps.
Everton are believed to have initially offered £200,000 for the former Leeds academy product.
Both clubs agreed that a figure would be set by a tribunal of the Professional Football Negotiating and Consultative Committee (PFCC), which is made up of representatives from the Football League, Premier League, PFA and Football Association.
The hearing, which took place at the Premier League's offices in London on Monday, declared that Everton should pay an initial £600,000, which could rise by an additional £750,000 depending on appearances.
There will be a further additional payment of £200,000 if the player makes a senior international appearance, while Leeds would also receive 20 per cent of any profit should Garbutt be sold on.
The Harrogate-born left-back is currently part of Everton's under-18 set-up and has England under-17 honours as well as reserve team experience for the Toffees already this season.
Everton's academy manager Ray Hall said: "This is very much a transfer for the future for Everton. It's not an uncommon move to make - many Premier League clubs invest in young talent with a view to nurturing and developing them.
"We are all delighted to have Luke at the club. He is an excellent prospect and he will be allowed to mature and learn his trade with our Academy staff and players.
"I know the manager (David Moyes) will be keeping an eye on his progress, as he does with all our boys, and if he looks ready to make the next step up then he may get his chance.
"We have shown as a club on a regular basis that we are prepared to give youngsters an opportunity at Everton."
A statement from the PFCC explained: "In setting this compensation fee, the PFCC took into account the costs of training and development, the player's age and playing record.
"Also the length of time he was registered with his former club, the terms offered by both clubs, the status of the two clubs, previous committee decisions and the interest shown by other clubs in acquiring the registration of the player."Reuse content