The 19-year-old will go out on loan to Spanish side Deportivo La Coruna for the 2016-17 season.
He becomes Pep Guardiola’s third signing this week after the arrival of winger Leroy Sane from Schalke and forward Gabriel Jesus from Palmeiras. Guardiola’s overall spending since replacing Manuel Pellegrini as manager in July now exceeds £100m.
Moreno said: “Pep Guardiola is one of the best managers in the world. I think he likes young players very much and he can improve young players tactically and technically. It will be great to work with him and to be part of a great team.”
In addition to strengthening his current squad, former Bayern Munich and Barcelona boss Guardiola has prioritised signing highly rated younger players for the future.
The Spaniard is still aiming to sign a central defender, with Everton’s John Stones his main target.
West Ham have agreed a fee of £20m to sign Ghana striker Andre Ayew who was Swansea City’ 12-goal leading scorer last season. The 26-year-old arrived on a free transfer last year from Marseille.
Meanwhile the Swans have completed the signing of Spain striker and World Cup winner Fernando Llorente from Sevilla.
Sunderland have signed defender Papy Djilobodji from Chelsea for £8m. The 27-year-old Senegal international has thus become new manager David Moyes’s first signing.
Central defender Djilobodji joined the Blues last year for £4m but only made one appearance before spending the second half of last season on loan at Werder Bremen.