The arrival of the 22-year-old, who impressed while on loan at Goodison Park last season, follows the summer signings of Simon Davies, John Ruddy and Per Kroldrup.
Arteta has signed a five-year contract and said: "I am so delighted. I have been waiting nearly two months. There has been so much speculation about where I was going but my mind was always with Everton.
"That is why I have been waiting and now I am so happy because this is what I wanted. I have signed for five years here and I want to help this team to grow, work very hard and do something very, very good next season."
Arteta goes straight into the squad for the Asia Cup in Thailand next week. He may also figure in the friendly at Motherwell tomorrow.
The Spaniard was on loan at Goodison Park for over four months at the end of last season and helped ensure Everton finished fourth in the Premiership, securing a Champions' League qualifying berth.
Negotiations over his permanent transfer have taken up most of the summer but the deal was only concluded after Arteta lowered his wage demands from £33,000 to £28,000 a week.Reuse content