The Netherlands international was a free agent following the expiration of his contract with Celtic and had previously been linked with Blackburn Rovers and Besiktas
The Netherlands international's contract with Scottish champions Celtic expired at the end of June, and the centre-back was linked with English outfit Blackburn Rovers and Turkish side Besiktas in recent weeks.
However, Loovens had his heart set on a move to La Liga and on Wednesday he took up residence at La Romareda.
"I am very happy to be in Zaragoza," the 28-year-old is quoted as saying by the club's official website. "This is a great club that competes in one of the best leagues in the world. I hope to have a good season."
Zaragoza boss Manolo Jimenez believes that Loovens' signing represents a major coup for the club given that the centre-back had turned down "offers from very big sides".
Loovens, who has been capped twice by Oranje, joined Celtic from Cardiff City during the summer of 2008.