"David stands out for his mobility, his ability to link up with his teammates, and his versatility in attack," said Atletico in a statement announcing the deal.
The 26-year-old Canadian international joins Atletico after a difficult first season in Serie A, scoring just eight goals after moving to Juventus from Lille in 2025.
David enjoyed five prolific seasons in France, scoring 109 goals in 232 appearances for Lille before making the move to Italy.
He will compete for a place alongside Argentina striker Julian Alvarez, who Atletico held on to despite strong interest from Barcelona.
According to Spanish media, Atletico have an option to buy David worth around €25 million (£21.4m).
The arrival of another striker was reportedly a request from coach Diego Simeone, regardless of what happened with Alvarez.
Atletico's firm refusal to sell Alvarez to Barca has left the Argentina international poised to remain at the club.
David joins Morten Hjulmand, Lee Kang-in, Cristian Romero and Alejandro Grimaldo in signing for Atletico this summer.