The 22-year-old – full name Jose Luis Mato Sanmartin – signed a four-year-deal on Wednesday after lengthy discussions between Real and Hoffenheim.
Last season Joselu scored 26 goals in 36 games for Real’s reserve side, and also scored on his first-team debut in the Primera Liga and Copa del Rey.
The striker’s good form had attracted interest from a number of Premier League clubs, but Hoffenheim have announced that the Spaniard will be turning out for them in 2012/13.
Hoffenheim coach, Markus Babbel told the club’s official website: “Joselu has already demonstrated his class at Real Madrid.
“But he’s still young as well and has a lot of potential; he fits in perfectly in this team and at Hoffenheim.”