The Spain midfielder joins the Hammers from Villarreal for a reported £24 million ($43.9 million) fee, signing a five-year deal that includes the option for a further 12 months.
“I feel very happy and very grateful for the opportunity that has been provided to me by joining West Ham.”— West Ham United (@WestHamUtd) June 14, 2019
Fornals, who started his career at Malaga, starred in Villarreal's run to the quarter-finals of the UEFA Europa League last term, scoring three goals and creating 22 chances from open play.
The 23-year-old, set to play at this year's European Under-21 Championship, is the first player to join Manuel Pellegrini's squad after the 2018-2019 Premier League season.
Pellegrini managed at both Malaga and Villarreal, with Fornals looking forward to working with the former Manchester City boss as well as reuniting with the club's director of football Mario Husillos.
"I'm very happy to be part of West Ham," Fornals said. "I feel very good, very happy and very grateful for the opportunity that has been provided to me.
"I want the club to continue betting on young and ambitious people, people who want to do well for the long term.
"I know about the loyal fans and the stadium, which is a beautiful stadium. The fans fill the stadium every weekend and that is something admirable, especially with the passion with which football is lived there. I think it is important to play with the support of your fans at home.
"I have worked with Mario before — I know him from when I was in Malaga. With Manuel, only when I saw him and admired him on TV.
"Of course, Manuel was a big influence because in the end he is one of the best coaches in the world and who doesn't want to work with people like that?"
In 2017, Fornals missed a LaLiga fixture against Barcelona after fainting during training, although Villarreal said he made an "immediate recovery".
He won his first cap for Spain in 2016 but has only made one further senior appearance for his country since then.