Recent reports had also linked him with Manchester City, Chelsea and Arsenal.
The signing of Modric is a major coup for Spurs manager Juande Ramos and the Tottenham hierarchy, who needed to make a statement of intent with the team falling away badly after their Wembley triumph against Chelsea in February.
Spurs' season has fizzled out disappointingly with just a single win in their last seven league games, and a swingeing overhaul of the squad was predicted for this summer, but the signing of Modric has comes as a major surprise.
After making his name in the Bosnian league as a teenager, Modric moved to Croatian club Inter Zapresic before joining Dinamo in 2005.
He made his debut for Croatia a year later and has gone on to win more than 20 caps for Slaven Bilic's side - including the home and away victories over England that cost them their place at Euro 2008.
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