Published: 2017-07-14 20:40:36 BdST
The 20-year-old was named player of the tournament at the European under-21 Championship this year. Financial terms were not disclosed, although reports in the Spanish media put the fee at 16.5 million euros ($18.8 million).
"Real Madrid... and Real Betis... have agreed the transfer of Dani Ceballos, who has signed a six-year contract with the club," Madrid said in a statement.
Ceballos will be presented to supporters next Thursday before he joins the team on their pre-season tour in the United States on July 21, where Real will face Manchester United, Manchester City and arch rivals Barcelona.
Ceballos's signing is the latest sign of manager Zinedine Zidane's side's attempt to shore up the best young talent in Spanish football and follows the capture of 19-year-old left back Theo Hernandez from Atletico Madrid earlier in July.
Ceballos will join up with Spain under-21 teammate Jesus Vallejo, who has recently returned to Real from a loan spell at Eintracht Frankfurt, and winger Marco Asensio, who had an impressive first full campaign last season scoring in the 4-1 victory over Juventus in the Champions League final.
Ceballos's hopes of being a footballer were threatened by a bout of chronic bronchitis which forced him to leave boyhood club Sevilla aged 12 but he resurrected his career at Betis, spearheading the club's promotion to the top flight in 2015.
He has been touted as one of the hottest prospects of Spanish football and according to reports in the Spanish media Real had to fight off attempts from Barcelona for his signature.
The 20-year-old will face a real battle in holding down a first team place at his new club, however, as he joins a talent- packed midfield also containing Luka Modric, Isco, Toni Kroos, Casemiro, Mateo Kovacic and Marcos Llorente.
His signing follows the departure of 2014 World Cup Golden Boot winner James Rodriguez, who joined Bayern Munich on loan earlier this week. ($1 = 0.8762 euros)