The 17-year-old, born in Tallinn in June 2009, joins from FC Flora, where he came through the club's youth academy and is regarded as one of the finest talents to emerge from the Baltic region in recent years.
Kaares first announced himself at just 14 years old, becoming the second-youngest goalscorer in Estonian second-division history when he found the net for Flora's reserve side in April 2024.
He made his senior breakthrough the following year, and has since gone on to make 13 appearances in Estonia's top flight, scoring two goals and providing two assists.
Standing at close to 1.90m, Kaares scored two goals and provided two assists in the Estonian top division last season, leaving him with plenty of room to progress.
He arrives on the back of a standout European Under-17 Championship, where he captained Estonia through the group stage before their exit, having also represented his country at Under-16 and Under-19 level.
Villarreal must now decide whether he will begin life at the club in the academy or step straight into a more senior set-up, with the Spanish side registering him with their Primera RFEF reserve team despite his age typically pointing towards the Juvenil A youth side.
Described by analysts as a right-footed and quick forward, Kaares is said to be capable of sharp turns with the ball and possesses strong combination play, though scouts note he can occasionally be one-paced in decision-making and has room to improve his aerial game relative to his physical stature.
Kaares said he was delighted to join a club of Villarreal's stature, adding that he was excited for the challenges ahead and would give his all to succeed.
FC Flora's sporting director, Taavi Trasberg, thanked the player for his years at the club and wished him well, describing his move to Spain's top flight as a significant achievement for Flora's academy system.
Villarreal's academy staff will now assess his development path over the coming weeks as they map out his introduction to Spanish football.