The 28-year-old defender becomes Diego Simeone's fourth signing of the summer, with Spurs retaining a 15 per cent sell-on clause as part of an agreement worth £34.2 million, or around €40 million.
Arsenal had explored a move for Romero in recent days after William Saliba's back injury left them short at centre-back, but Tottenham made clear they had no intention of selling their captain to their fiercest rivals, leaving Atletico as the only realistic destination once talks progressed.
Romero leaves north London having made 156 appearances across five seasons, scoring 13 times since arriving on an initial loan from Atalanta in 2021 that became a permanent £42.5 million deal.
He captained Spurs to Premier League survival last season and played every game but one of Argentina's run to this summer's World Cup final. Having been given extra time off following the tournament, Romero was due back in pre-season training with Tottenham in the coming days before the move to Spain was finalised instead.
His departure adds to a difficult week for Spurs supporters, who are also set to lose England full-back Djed Spence to Inter Milan in a deal worth around £25.6 million, with the Italian club in advanced talks to complete that transfer.
Tottenham have moved to soften the blow at the back by signing Jan Paul van Hecke from Brighton and Marcos Senesi on a free transfer from Bournemouth, moves that look increasingly like contingency planning for life without their captain, while Micky van de Ven has penned a new long-term deal of his own.
Atletico Madrid's spending this summer already includes the additions of midfielders Kang-in Lee and Morten Hjulmand and left-back Alejandro Grimaldo, and completing the Romero deal would take their outlay for the window beyond £100 million.
Simeone is looking to strengthen his defence after Atletico finished fourth in La Liga last season, missing out on third place to Villarreal, and Romero, who has previously spoken of his admiration for Spanish football, is understood to have given the move his full backing.