The 29-year-old Frenchman spent two-and-a-half seasons at the Mestalla stadium after joining from Arsenal in January 2018.
Coquelin is the second high-profile departure from Valencia in recent weeks after Ferran Torres left for Manchester City last week. Club captain Dani Parejo is also expected to join Villarreal in the coming days as Valencia resort to cost-cutting measures to minimize the financial implications of the coronavirus pandemic.
Coquelin made 36 appearances in all competitions for Valencia last season as Los Che finished ninth on the table.
Coquelin won the Copa del Rey trophy during his time with Valencia and he leaves the club with 89 appearances in all competitions.
"Villarreal and Valencia have reached an agreement for the transfer of Francis Coquelin," Villarreal said on their website. "Welcome aboard the Yellow Submarine."
Expressing his delight after being unveiled at his new club on Wednesday, Coquelin said: "I am very happy to sign for Villarreal today, we hope it will be a great season. Endavant!"
Villarreal, who finished fifth in La Liga last season, recently appointed former Arsenal manager Unai Emery as the club’s new boss.
The Yellow Submarines lost the services of Santi Cazorla at the end of the season but have also augmented their squad with the acquisition of Japanese youngster Takefusa Kubo on a season-long loan deal from Real Madrid.
