The 24-year-old arrived in the Bundesliga on loan in 2020 and quickly established himself as a key figure in the heart of the Stuttgart defence.
After featuring 21 times in the top flight last year, Mavropanos scored four goals in 31 Bundesliga games for Stuttgart in the 2021-22 season, helping his side secure top-flight survival.
Mavropanos was due to return to Arsenal this summer, but an option to buy clause in his loan deal with Stuttgart was triggered due to the club avoiding relegation from the Bundesliga.
The Greece international therefore joins Die Roten permanently on a three-year deal, and his signing was confirmed at the same time as Atakan Karazor's three-year contract extension.
"I have always done my best and will continue to do my best for this great club. The trust of those responsible and the affection of the fans in Stuttgart are a great motivation for me," Mavropanos told the official Stuttgart website.
Stuttgart CEO Alex Wehrle added: "With the contract extension of Atakan Karazor and the permanent commitment of Dinos Mavropanos, two important personnel decisions were made immediately after the season finale.
"Both players have impressively demonstrated their importance for VfB, so we're happy that we can plan with them for the long term."
Sporting director Sven Mislintat - who previously served as Arsenal's head of recruitment for 14 months - said: "In addition to his qualities as a footballer, Ata is an important factor for our team as a person and as a leader.
"Dinos brings enormous power and willpower to our game and has also stabilized at a high physical level. Both have made a clear commitment to VfB and our path, and we are very much looking forward to continuing to work together."
Mavropanos's Arsenal contract was due to expire in 2023, and the former PAS Giannina man leaves the club having made only eight appearances for the senior side since his arrival in January 2018.
Seven of those appearances came in the Premier League, where he also received a red card 15 minutes into a 3-1 defeat against Leicester City in May 2018.
While Mavropanos has completed a permanent transfer away from Arsenal, the Gunners are expected to integrate William Saliba into the first team for the 2022-23 season.
The 21-year-old was recently named the Ligue 1 Young Player of the Year for the 2021-22 season due to his stellar showings on loan at Marseille, who are not giving up hope on keeping the France international permanently.
Arsenal are expected to miss out on a place in the Champions League ahead of their Premier League final-day clash with Everton, but Mikel Arteta will reportedly be backed with significant funds regardless. body check tags ::