The Champions League hopefuls were keen to strengthen their defence before the end of the summer transfer window and have now finalised the transfer of Alderweireld on deadline day.
The Belgium international, whose Ajax deal was due to expire in 2014, had already passed his medical on Saturday and has now signed the deal with Atletico.
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He had also caught the attention of clubs such as Bayer Leverkusen and Liverpool this summer, but will now continue his career at Atletico instead.
"I wanted to sign for one of the best club's in Europe," he told their official website. "I'm happy to be a part of this club."
Meanwhile, Atleti have also signed Saint-Etienne midfielder Josuha Guilavogui from Saint-Etienne for a fee believed to be in the region of €10m (£8.49m).
The France international, 22, has spent all of his professional career at Stade Geoffroy-Guichard, but has been widely linked with a move away from the club this summer.
However Diego Simeone's men have seen off reported competition from the likes of Arsenal, clinching his signing on a five-year deal.
He said: "I am pleased to have moved to a club as big as Atletico and to pay for these fantastic fans. I hope to work hard so that the team continues to win titles in the coming years."