The 28-year-old right back joins Atletico from last season's beaten Champions League finalists Tottenham Hotspurs for a fee of around 25 million euros (about 28 million US dollars) and will be the first Englishman to play for the club since the 1930s.
Espanyol will receive just 12.5 million euros from the sale of Mario Hermoso to Atletico Madrid, with the remaining half going to Real Madrid as per the agreement which took the defender to the Periquitos in the first place.
The England defender was officially presented by Atletico on Thursday afternoon after leaving Tottenham to sign for the Spanish giants on a three-year deal for a reported £20million.
"From watching Atletico over the years you see what he demands of his team, the work ethic".
The England worldwide completed his move to Atletico from Tottenham on Wednesday and also insisted it was always his intention to play overseas. It's like a big family here and I wanted to be a part of this. They have world class players and a brilliant manager.
"I'm looking forward to learning the language straight away which is my first priority".
He added: "Obviously the Premier League is one of the best leagues in the world, but when Atletico Madrid were interested I didn't think twice".
Spurs are looking for as a replacement for the England worldwide right-back, and have identified 25-year-old Albania global Hysaj and 28-year-old Italy global Florenzi, who can also operate as a midfielder, according to the report.