The 24-year-old centre-back has cost Atletico €25m upfront despite having just 12 months left on his Espanyol contract, with Hermoso signing an five-year deal at the Wanda Metropolitano.
A Real Madrid academy product, Hermoso only made his top-flight debut in the 2017-18 campaign but has since enjoyed a rapid rise.
Hermoso particularly impressed last term as Espanyol - who have a 20 per cent sell-on clause - finished seventh in LaLiga, earning his first Spain cap last November.
📝 | Agreement with @RCDEspanyol for the transfer of @mariohermoso5.— Atlético de Madrid (@atletienglish) July 18, 2019
🇪🇸 The Spaniard has signed a contract with our club for the next five seasons 💪
👋 Welcome, Mario! 🔴⚪🔴
👉 https://t.co/njZjsD8r0f #AúpaAtleti #WelcomeHermoso pic.twitter.com/5aM5RxfIjP
But Espanyol's apparent initial reluctance to reduce their asking price from the reported €40m release clause in his contract meant negotiations dragged on.
An agreement has been found, though, and Hermoso is the latest defender to join Atletico after Felipe, Renan Lodi and Kieran Trippier, who arrived a day earlier.
Hermoso takes Atletico's reported expenditure to €248m with Marcos Llorente, Joao Felix, Hector Herrera, Nicolas Ibanez and Ivan Saponjic also new to the club, although they recouped €120m from Antoine Griezmann's controversial departure to Barcelona.