The 22-year-old signed a three-year contract, including an option to extend his deal for another year.
"I'm really happy to be here. I have experienced playing in the Championship before and it is a league that I enjoyed playing in. I want to use that experience now and to help this team achieve its aims", Toral said.
The Spaniard began his career in Barcelona's academy before he moved to Arsenal in 2014.
He will become Hull's tenths summer signing, as Slutsky wants to strengthen his side for the Championship campaign.
"This is a massive move for me, the biggest so far in my career, and I can't wait to get started", Toral added.