The clubs did not disclose the transfer fee but Spanish media reported that Villarreal paid around 12 million euros ($13 million) for the 23-year-old.
"At an impressive 1.93 metres, he is quick between the posts, he is able to dominate aerial duels and has excellent reflexes – all of which make him a very talented goalkeeper with a big future," Villarreal said in a statement.
Luiz Junior made 140 appearances for Famalicao since joining their academy at the age of 18. He will be replacing Filip Jorgensen at Villareal, who joined Chelsea last month on a seven-year-long contract.
Villarreal visit Sevilla in the league on Friday after drawing 2-2 with Atletico Madrid at home in their opener.