The 20-year-old defender has put pen to paper on a deal with the club until June 2029, subject to international clearance.
Born in Palma, Spain, to Moroccan parents, Riad is an imposing defender who began his youth career with RCD Mallorca before moving to Barcelona, where he graduated from the world-renowned La Masia academy.
Riad joins Palace following an impressive season on loan at Real Betis, where he featured 30 times in all competitions and played an integral role in Manuel Pellegrini’s side.
The defender has recently earned his first three senior caps for his country, debuting for Morocco against Sierra Leone in January and scoring his first international goal against Congo-Brazzaville earlier this week, and now becomes Palace’s first arrival of the summer transfer window.
Chairman Steve Parish said: “As a full international at just 20-years-old, Chadi is an exciting young player who we are delighted to be able to welcome to the club.
"His arrival adds quality to a squad already packed with talent and potential, and I look forward to seeing him contribute to the team this season and beyond.”
Riad added: “I’m really happy to join Crystal Palace. I was interested in coming here because of the history of the club, and the league in which it plays. They have been telling me how they played this year and I think it complements perfectly the way I play.
“The club has high-level players who are young and I have come here to follow their same trajectory, to grow as they have grown.”
Everyone at Palace would like to welcome Chadi to South London, and wish him the very best for his career in red and blue.
