Fornals, 23, has agreed a five-year contract with the Hammers, which includes the option of a 12-month extension.
Sky Sports report that the deal is worth £24 million, making him the second most expensive signing in the clubs history, although significantly short of the £40m that they shelled out to sign Felipe Anderson from Lazio last summer.
Fornals is set to feature for Spain at the European Under-21 Championships in Italy.
He has worked with West Ham's director of football Mario Husillos at Malaga where Fornals started his senior career.
I believe this is exactly what the team need to look for, good professionals that won't put the club in jeopardy for their own benefit.
'I know about the loyal fans and the stadium, which is a attractive stadium.
He knew Husillos from his time in Malaga but has never played for or worked with Pellegrini. With Manuel, only when I saw him and admired him on TV.
The Castellón-born footballer, who has collected two senior worldwide caps with Spain, will join his new teammates following this summer's UEFA European Under-21 Championship, but to say he's delighted is an understatement.
He said: "Of course, Manuel was a big influence because in the end he is one of the best coaches in the world and who doesn't want to work with people like that?!"
The Telegraph claim West Ham have splashed out a whopping £25million to bring the 23-year-old midfielder to the London Stadium this summer, which sees Manuel Pellegrini finally add some cover in the middle of the park.
"This is something that is very important for us at West Ham United now - not only a very good player but also a very good person with a good mentality".
But has Fornals dropped a big hint that 22-year-old Gomez could be the next through the door in his first interview since becoming a West Ham player?