The Uruguayan winger has brought his search for a new club to an end after his last season at the Estadio do Dragao was marred by disciplinary problems
The Uruguay international joins the Europa League champions on a free transfer as his contract with the Portuguese champions expires in June.
Rodriguez joined Porto in 2008 after a season on loan at Benfica and played an important role in his first season at the Estadio do Dragao.
But he was close to leaving the club in the January transfer window after falling out with Vitor Pereira, but eventually returned to the team's set-up after making peace with the coach.
However, the former Paris Saint-Germain player was allowed to return to Uruguay in April after being removed from the squad amid fresh disciplinary problems, this time after a training-ground rift with teammate Joao Moutinho.
The 26-year-old is Atletico's first summer signing, as coach Diego Simeone bids to strengthen his side after they missed out on Champions League football following a fifth-placed finish in La Liga.