His initial 12 month loan will cost €12m, with another €25m obligation to buy, with added bonuses taking it up to €50m.
Barella has signed a five-year contract, believed to be worth €2.5m per season.
Cagliari paid a classy tribute to their former midfielder after his transfer was confirmed:
“Cagliari Calcio officially announces the signing of Nicolò Barella to FC Internazionale Milano. The player leaves the Club on loan, with a compulsory definitive transfer to be completed.
“In every men's life, sooner or later, the time will come to leave home and continue the journey. Cagliari Calcio sees Nicolò leaving with an emotional farewell.
“From Gigi Riva's Academy to the Cagliari's Academy, from playing for Cagliari first team to conquering Italy: that child, too strong to play along with the guys of his age, has become a champion. With the red and blue shirt on, he played 112 games scored 7 goals and made 7 assists: but stats and number do not show the true impact that Nicolò has made for the club and the city.
“Born in Cagliari, he has always been a fan of his city's team. He grew up carrying on his shoulders more responsibilities: with that typical Sardinian pride, he developed the attitude of the fighter, which has prepared him for any challenge, leading by example with the captain's armband.
“A natural born leader, an explosive mix of talent, technique, persistence and versatility. Having such a crucial role in the youth team has prepared him to play 7 games for the Italian National Team scoring 2 goals.
“The colours of Red and Blue will always be home for you. So long, Nicolò!"