The 24-year-old centre-back joined Arsenal on loan last summer and quickly established himself under Mikel Arteta, making 39 appearances across all competitions as the Gunners won the Premier League title. The purchase option in his loan agreement has now been activated.
Bayer Leverkusen confirmed the completion in a statement: "The conditions for the purchase option were met and defender Hincapié will therefore continue his career with the London club in the Premier League in the coming years."
Hincapié is currently at the World Cup with Ecuador, who beat Germany 2-1 in their final Group E game to qualify for the last 32 for the first time since 2006.
The Ecuadorian was signed by Leverkusen from Argentine club Talleres in 2021 for around €7 million and developed into one of the Bundesliga's most effective left-sided centre-backs during four seasons at the BayArena, including the title-winning campaign of 2023-24 under Xabi Alonso. He made 154 appearances for the German club.
His ability to play on the left of a back three or four gives Arteta flexibility in his defensive structure. Arsenal's Premier League success last season was built on defensive solidity, and Hincapié was a key part of it. Securing him permanently on a deal until 2031 ensures continuity at a position that had previously been a source of uncertainty.
At £34.5 million, the fee represents good value for a player who has proven himself at the highest level and still has significant development ahead of him at 24. Arsenal are also in the market for a striker and additional midfield cover this summer as Arteta looks to build on their title and mount a stronger Champions League challenge.