The 24-year-old came through the youth ranks at Boca Juniors and has had spells with Liverpool and Galatasaray. Local media said the deal was worth around 3.5 million euros.
Insua will help provide cover at left-back for Brazilian Felipe Luis, as Atletico chase silverware on three fronts.
Diego Simeone's side are second in La Liga, have reached the semi-finals of the King's Cup where they will meet Sevilla, and take on Rubin Kazan in the last-32 of the Europa League next month.
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