The World Cup-winning left back will join Bayern Munich ahead of the start of next season, along with international teammate Benjamin Pavard.
Bayern Munich have agreed to a deal with Atletico Madrid to sign defender Lucas Hernandez for €80m, with the Frenchman set to join the club on July 1.
Lucas has been linked with a move to the Allianz Arena for several months, and Bayern have now put an end to the speculation by confirming the deal.
The club confirmed the news on their official website, writing: "Lucas Hernandez will move from Atletico Madrid to Bayern Munich on 1 July. The 23-year-old defender has signed a five-year contract until June 30, 2024, and Atletico Madrid have received the fixed transfer fee of €80m."
Bayern sporting director Hasan Salihamidzic revealed he was delighted to sign the World Cup winner, adding: "I am very happy that in Lucas Hernandez we have been able to sign one of the best defensive players in the world and a world champion.
"Lucas can be used both in central defense and as a left back. In addition, Lucas will continue our tradition of outstanding French players and will strengthen our team."
However, club doctor Hans-Wilhelm Muller-Wohlfahrt confirmed Lucas will need to undergo surgery to fix a knee ligament injury. Fortunately, the Frenchman is expected to be fit and available for the start of the 2019/20 Bundesliga season.
Hernandez becomes the second French World Cup-winning defender to commit his future to Bayern Munich, with the club already having secured the summer arrival of Benjamin Pavard from Stuttgart.
Hernandez admitted he was proud to make the move to the Allianz Arena. He said: "Today is a very important day in my football career. Bayern Munich is one of the best clubs in Europe and the world. I am proud to be able to fight for all titles for Bayern in the future.
"I would like to thank Atletico, the management, the coaches, my teammates and the fans for a wonderful 12 years. Atletico will always be a part of me. Now I'm happy that I'm taking the next step at Bayern."