The 26-year-old Brazilian moves to the Mestalla for an undisclosed fee, believed to be around £10million, as Arsenal boss Arsene Wenger trims his squad.
Gabriel sustained a serious knee injury in Arsenal’s final Premier League game of last season and did not feature in pre-season.
He scored one goal in 64 appearances for the north London club.
Spanish club Valencia announced the signing in a statement on their official website. It read: “Valencia have reached an agreement with Arsenal for the transfer of … Gabriel Paulista.
“The Brazilian player has signed for the next five seasons until June 30, 2022, with a termination clause of 80 million euros.”
Gabriel could be the first of a number of departures at the Emirates, with Lucas Perez, Calum Chambers and Joel Campbell also linked with moves away.
Arsenal have reportedly held talks with Dennis Praet's agent and could make a £22million move for the Sampdoria midfielder this summer.
Gareth Bale could leave Real Madrid this summer despite proving to be the match-winner during Saturday's Champions League final.