The 26-year-old passed a medical at the club on Thursday and becomes the Toffees' second signing of the summer following the arrival of Danish defender Lars Christian Jacobsen.

Castillo is a defensive midfielder who played for El Nacional and El Deportivo Espoli in Ecuador before heading for Eastern Europe.

Everton must now wait to see if international clearance for the player is received in time for him to play in the Premier League clash against Portsmouth on Saturday.

Castillo told evertonTV: "I know that Everton are a big club who have a history of playing in important competitions like the UEFA Cup.

"I hope I can do my best for the team."

Castillo has been with Red Star Belgrade for the past two years and has 33 caps.

But boss David Moyes' first signing this week, Jacobsen, is set for a place in the squad to face Pompey.

The club received his international clearance earlier today but he is unlikely to start in the match at Goodison Park.

He had been a free agent since leaving Nurnberg at the end of last season and has been training back in Copenhagen but lacks match fitness.

Everton are also chasing Inter Milan winger Victor Obinna on a loan move.

Obinna is a Nigeria international colleague of Everton's Victor Anichebe and only joined Inter earlier this week.

But the Italians have decided to send him out on loan, and Everton are aiming to bring the player to the Premier League.

Everton dropped out of the race for Shaun Wright-Phillips because they could not match his wages, with the player having now joined his former club Manchester City.

Everton are still searching the market for new signings, and may well try again for Sporting Lisbon skipper Joao Moutinho, but it is unlikely they will be able to prise Stephane Mbia away from Rennes.