The 24-year-old spent last season on loan at the Mestalla but now joins the club on a permanent basis from Benfica after Valencia exercised their right to buy the forward.
The Brazil-born forward has signed a four-year deal through to 2019, with reports in the Spanish press Spanish press claiming Valencia will pay the Portuguese champions 30m euros.
A statement from Valencia read: “Valencia CF has reached an agreement with SL Benfica to acquire Rodrigo Moreno, who has signed a contract with Valencia until June 30, 2019.”
He scored three goals in 31 appearances last season for Valencia, who qualified for the Champions League by finishing fourth in La Liga.
Rodrigo, who made his Spain debut last October in a Euro 2016 qualifier against Luxembourg, is delighted with his permanent switch to the Mestalla stadium.
“After a year in Valencia, I feel really happy and determined to be better every day,” he said on his club’s official website. “My biggest aim is to help Valencia remain competitive and improve.
“I want to help the club achieve all of its aims and I hope to score many more goals.”
Valencia, coached by Portuguese tactician Nuno, will have to go through qualifying this summer in order to play in the Champions League next season.
“Now we will have to prepare for the Champions League preliminary round,” Rodrigo said. “I’ve been fortunate enough to play in this competition with Benfica and now I want to do so with Valencia.”
Meanwhile, midfielder Dani Parejo is close to tying up a lucrative four-year contract extension with Valencia, according to reports in Spain.
Parejo, who has one year left on his current contract, enjoyed an impressive campaign with Valencia, scoring 12 goals and providing five assists in 34 league appearances.
The new deal will see Valencia increase the 26-year-old’s buy-out clause to a reported 50million euros.
Rodrigo is Valencia’s third signing of the summer after they made Portuguese midfielder Andre Gomes’s loan from Benfica permanent and signed Brazilian midfielder Rodrigo Caio from Sao Paulo.