Nacho has joined Al Qadsiah on a two year deal after leaving Real Madrid, the Saudi Pro League club announced on Thursday.
The Spanish veteran defender, who captained Madrid to the Champions League and LaLiga double last season, will join the newly-promoted SPL side as a free agent after Euro 2024.
Nacho underwent a medical in Germany while on international duty with Spain ahead of his move to Saudi Arabia.
The 34-year-old, who joined Madrid as a 10-year-old, has won a joint-club record 26 trophies in his 12 seasons with the first team. His trophy haul includes six Champions League titles.
"I'm so grateful to Real Madrid," Nacho said at a Spain news conference on Thursday.
"Until a few days ago, I hadn't signed for my new club and Madrid told me they would be there if I changed my mind. I don't need a send off like [Toni] Kroos had to realise how much I'm loved.
"I always had clear that if I didn't finish my career at Madrid, I wouldn't want to play against them. I want to experience something new, something different. My life is going to be turned upside down but that's what I want. I'm very happy."
Despite being in advanced talks with Saudi giants Al Ittihad, the veteran centre-back opted to sign for Al Qadsiah.
Nacho's coach at Al Qadsiah will be fellow Spaniard Michel, who guided the Khobar-based outfit to finish top of the first division league in his debut season at the club.
"I could have stayed one more year but there's nothing left to win with this jersey. It doesn't mean I'm lacking ambition. I thought it was the right time. I am calm and confident with the decision I've taken," Nacho said.
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