Cheryshev, who starred for Valencia on loan last term, has signed a three-year deal, which includes a buyout clause of €80 million (£72m/$90m).
The Copa del Rey winners have reportedly paid less than the €7m that is said to have been the initial asking price for an outright purchase.
One of the stars of last year's World Cup, Cheryshev impressed enough in 2018-19 to earn a permanent move, one which has been set for completion since the announcement that an agreement in principle had been reached with Villarreal on June 29.
He would move to Burgos' youth system and then finally to Real Madrid, where Cheryshev would spend the remainder of his youth career.
The attacker would fare well playing for Madrid's B team, but struggled to make the transition to Los Blancos' senior squad.
Arguably his most memorable moment for Madrid came with his inclusion in the team's Copa del Rey match against Cadiz in December 2015, during which he scored a goal but was later ruled ineligible to play as a result of yellow card accumulation while on loan at Villarreal the previous season.
As a result, Madrid was expelled from that year's tournament and Cheryshev would only feature for the club a total of twice in his career.
Loaned out to Valencia the following season, the attacker scored three times for the club before being sold to Villarreal in the summer of 2016.
But after two seasons at Villarreal where he struggled to consistently remain in the XI, he returned to Valencia last season on loan and managed a pair of goals and two assists in La Liga.
He also chipped in another goal and pair of assists in the Europa League as Valencia pushed all the way to the semi-finals.
Cheryshev helped the club to the Copa del Rey final but was unable to play in Valencia's triumph over La Liga champions Barcelona as he was injured.