The 23-year-old winger has penned a five-year contract with the Parkhead club after turning down offers from elsewhere to become the club’s seventh summer signing since the return of manager Brendan Rodgers.
Palma, who has six international caps, has spent the past 18 months in Greek football, where he has netted 16 goals across 49 appearances, after starting out in his homeland with CDS Vida. He could now be handed a Celtic debut against Rangers at Ibrox on Sunday, subject to international clearance.
Celtic are also close to finalising season-long loan moves for Liverpool centre-back Nat Phillips and Benfica midfielder Paulo Bernardo with reports on Wednesday claiming both deals were nearing completion.
“We are really pleased to bring Luis to the club,” Rodgers told the Celtic website. “He is a player who had a lot of options but, of course, we are delighted he has chosen to come to Celtic, an opportunity which really excites him.
“He is a very talented, player who likes to play attacking football so we hope he will be a very good fit for the team.
“Luis has reached a very good level so far, playing a lot of games and achieving international recognition, but I also know that he is ambitious to improve and continue his development with us.
“We look forward to Luis joining up with the squad and to start working with him.”
Palma insisted he “could not be happier” with the move, adding: “It is a very special day for me and an honour to be announced as a Celtic player. I can’t wait to be part of this great club, a club I know all about as one of the great names in world football.
“I know that Celtic always aims to play football the right way, a team that entertains and has a pedigree of winning and delivering success, and this is what I want to be part of.
“I have spoken to the manager and I'm really looking forward to joining him and my team-mates and starting my journey with such a brilliant club.
“I have already had so many messages of support and I thank all our fans for the welcome I have been given.
“I can’t wait to play in front of the Celtic supporters and I will do all I can to bring our fans good football and some good moments.”