He has signed a four-year deal at Mestalla, with an €80m (£72m/$91m) release clause included with the contract.
The 30-year-old joined Barca from Ajax in 2016 but has been unable to secure a regular place in Ernesto Valverde's starting XI.
Germany international Marc-Andre ter Stegen is the established number one at Camp Nou, meaning Cillessen has been restricted to just five Liga appearances over the last three seasons.
He made 32 appearances for the club in all competitions, with his final game the Copa del Rey final defeat to Valencia at the end of last month.
As a result Cillessen was keen to move on this summer in order to secure first-team football.
Current Valencia goalkeeper Neto is expected to move in the other direction later this month for a similar fee to act as understudy to Ter Stegen, with Cillessen replacing him as number one at Mestalla.
Barcelona were initially believed to be looking for in the region of €60m (£53m/$68m) for Cillessen, so this deal represents something of a climbdown.
Prior to his move to Valencia a number of European sides were linked with the Dutchman.
Manchester United were believed to be considering a deal, as David de Gea continues to stall on signing a new contract at Old Trafford.
Cillessen began his career with NEC Breda in 2010 before moving to Ajax for around €3m (£2.7m/$3.4m) a year later.
He made close to 150 appearances for the club over six seasons, winning three Eredivisie titles between 2012 and 2014.
That prompted Barcelona to pay €13m in the summer of 2016 to bring the goalkeeper to Catalunya.
Internationally, Cillessen has won 48 caps for the Netherlands since making his debut in 2013 and was their first-choice goalkeeper for the 2014 World Cup in Brazil, where the Louis van Gaal's side reached the semi-finals.