The full-back, who was part of the France team to win the 2018 World Cup, has signed a five-year contract with the Bundesliga champions having completed a medical over the international break.
He becomes the second defensive reinforcement to have agreed to join Bayern this summer, with international team-mate Benjamin Pavard also on his way to Bavaria from Stuttgart.
"Today is a very important day in my football career," Hernandez said in a statement released by his new club. "Bayern Munich is one of the best clubs in Europe and the world. I am proud to be able to fight for all titles for Bayern in the future.
"I would like to thank Atletico, the management, the coaches, my team-mates and the fans for a wonderful 12 years. Atletico will always be part of me. Now I'm happy that I'm taking the next step at Bayern."
Hernandez leaves Atletico having formed a key part of their defence under Diego Simeone in the Spanish capital.
Since making his debut for the Rojiblancos in 2014 he has made 110 appearances for the club, though he will play no further role for Simeone's side this season as he requires knee ligament surgery.
"In our sports medical examination, we found damage to the inner ligament of the right knee, which must be repaired surgically," Bayern club doctor Hans-Wilhelm Müller-Wohlfahrt revealed.
"In my experience, Lucas Hernández will be available to FC Bayern for the start of the 2019-20 Bundesliga season."
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