Bayern Munich reportedly met the €40million release clause in the 23-year-old’s Bilbao contract.
The Spain international has signed a five-year contract with Bayern Munich.
“I am very happy and pleased to be at a club with such a history,” he said. “I have had a very long wait.”
“Of course this is a large sum,” Bayern CEO Karl-Heinz Rummenigge said. “But the player participates indirectly in it. He has given up large sums in his salary.”
Martinez has previously been linked with the likes of Manchester United, Manchester City and Arsenal.
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Liverpool have unveiled their new home kit for next season, sticking with the hugely popular retro styling of the current shirt.
The reputation of the Premier League means it is the most popular and one of the most watched leagues in the world.