The 26-year-old has signed a long-term contract with the Gunners shortly before the transfer window closed, according to the Premier League club's website (www.arsenal.com).
Monreal, who has nine Spain caps, will strengthen manager Arsene Wenger's options in defence after Kieran Gibbs was injured against Liverpool on Wednesday.
Replacement left back Andre Santos has struggled this season, leading to Wenger moving for the experienced Monreal as Arsenal push for a top-four finish.
"We are delighted that Nacho Monreal has agreed to join us," Wenger said. "We have been monitoring him for some time now and are really pleased that we"e been able to agree this move.
"Monreal is a strong left-sided defender with good experience at both club and international level.
"He is a technically gifted player, a good crosser in the final third and strong in the air."
Arsenal are sixth in the Premier League, four points behind the Champions League places.