The Spaniard had made the Ghana international his top transfer target throughout the summer but little progress had been made.
That was until the final 24 hours of the window during a whirlwind period for the club.
The Gunners had forked out his £45m release clause, as well as a number of other fees, totting up the total to £52.5m.
The transfer also includes a £2.5m signing-on fee and Partey’s agent will receive a 10 per agent commission.
He has also signed a four-year contract, worth £220,000-a-week, with an option for another season.
Arteta will be delighted after finally signing his top target, who he eyed at the beginning of the market.
And the former Manchester City coach has gone some way on how the Ghanaian will fit into his team.
He said: “We have been watching Thomas for a while, so we’re now delighted to add such a high-quality player to our squad.
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“He is a dynamic midfielder with great energy.
“He brings a lot of experience from a top club that has competed at the highest level in La Liga and the Champions League for several years.
“We’re very impressed with his attitude and his approach to the game.
“He’s an intelligent footballer and we’re looking forward to him integrating into our system and contributing to the progress we’re building at the moment at the club.”
Arsenal chief Edu played a major role in landing Partey after a busy deadline day that also saw Lucas Torreira go the other way.
“Thomas has all the right attributes to be a top player for Arsenal,” Edu said.
“He is a leader on and off the pitch and he is exactly the kind of player and person we want at the club.
“We already feel like we know Thomas very well based on the work we have done analysing his performances closely in recent times.
“With his all-round game and positive aggressive style, he will be a brilliant addition to our squad.
“We’ve made a strong start to the season and we want to continue to build on this with Thomas now part of our club.”