Iborra joined the Premier League side from Sevilla in 2017, scoring four goals in 37 appearances, and has signed a contract with Villarreal until June 2023.
"At 30-years-old, Iborra is an experienced midfielder who is dominant in the air," Villarreal said in a statement.
"He has quality in front of goal, timing his runs from deep to perfection. He is a prestigious signing for the Yellow Submarine."
Iborra, born near to his new club, in Valencia, joins with Villarreal 17th in the top flight, one point above the drop zone.
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(Reporting by Rik Sharma; Editing by Christian Radnedge)
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