The 17-year-old midfielder has only cost the Catalan giants £1.8million, with his move coming as a blow to the Premier League giants.
The Croatian midfielder has snubbed a move to England despite long term interest, and has signed a five -year-contract at the Nou Camp, and will complete the move at the end of the season.
“I’m delighted and it’s difficult to find the words to describe how I feel,” Halilovic said.
“Many thanks to Dinamo, who will always remain my first love and the club who made my dreams come true.
“Of course, Barcelona is something special, I’ve loved the club since I was small and I feel honoured to have the opportunity to play for Barca.
“Before everything, I want to win the double with Dinamo and then focus on my new club.”
The 5ft 7in midfielder has already won three senior caps for his country at the age of 17.