The 18-year-old reached the Miami Open semi-finals last week before a tight loss to John Isner.
He rose 24 places to a career-high ranking of 33 on Monday and is the youngest player in the world's top 50.
"I have great memories from my junior career at the Caja Magica,
where I hope to produce some magic again," said Auger-Aliassime, who led
Canada to the 2015 Junior Davis Cup in Madrid alongside Denis
Spanish veteran David Ferrer had already been awarded the first of
the four wildcards on offer, as the 36-year-old continues his final
season before retirement.
The Madrid Masters starts on May 5, with the final on May 12.