Isco has been a free agent since December when Sevilla terminated his contract four months after joining as Fabrizio Romano earlier reported.
The 31-year-old has 38 Spain caps, the last coming in 2019, and scored one goal in 19 games for the La Liga club.
It was reported earlier on Wednesday that Betis had agreed a one-year deal to sign Isco, whom head coach Manuel Pellegrini had previously worked with at Real Madrid, and the club have now confirmed the deal, using a rather striking video to do so.
Isco joins Ayoze Perez, Marc Roca, Hector Bellerin and Marc Bartra in having signed for Betis this summer, and he is likely to replace Sergio Canales in the first team setup, following the 32-year-old’s move to Monterrey.
It has been a very productive transfer window for Real Betis, and with deals for Barcelona pair Alex Collado and Chadi Riad set to be finalised, it will be getting even better.
After joining from Malaga in 2013, Isco helped Real win the Champions League five times and La Liga three times.
But Isco was released after just 19 games for Sevilla, scoring once and claiming three assists.
More than 10,000 fans attended Isco’s presentation as a Sevilla player in August, before coach Julen Lopetegui was sacked in October.
His move to Sevilla followed nine successful years at Real Madrid, where he won the Champions League five times and three La Liga titles.
Isco scored 53 goals in 353 games for Real Madrid, but made just 17 appearances during his final season at the Bernabeu.
The Valencia youth product also scored 12 goals in 38 games for Spain, with his last international appearance coming in 2019.
