The Italian's season-long loan deal at West Ham ended prematurely in January, after he failed to score in 11 games, and he joined Valencia on loan.
Zaza, 25, has since scored four goals in 14 games for Valencia - including two against Granada on Sunday - and the club have now exercised an option to make the deal permanent.
His contract will run until 2021.
Meanwhile, the club's chairwoman Layhoon Chan has announced she will resign on 1 July to be replaced by current executive director Anil Murthy.
Valencia are 12th in La Liga.
Former West Ham striker Simone Zaza has joined Valencia from Juventus in a deal worth £13.7m (16m euros).