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Suarez will return to Arsenal boss Unai Emery, with whom he worked during a loan period in Sevilla during the 2014-15 season.
Aged 25, he played 71 games with Barcelona, scoring eight goals and one goal for Spain.
"We are very pleased that Denis Suarez is joining us," Emery said on the Arsenal website. "He is a player we know well and I worked with him in Seville.
"He brings us quality and options in many different attack positions, so he can help the team."
The Spanish playmaker posted a photo of him with his teammates on his personal Twitter account and said: "You are a group of extraordinary people! Thanks for everything, see you soon. Good luck and Forca Barca."
Arsenal is fourth in the Premier League after beating Cardiff 2-1 on Tuesday.
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