The 28-year-old departs the Glaswegian giants after two seasons at Parkhead, scoring three goals in 87 appearances across all competitions.
Starfelt won five domestic honours with Celtic including last season's historic Scottish Premiership, Scottish Cup and League Cup treble.
The Sweden international featured regularly under former boss Ange Postecoglou last season, playing in a total of 37 games, before making his final appearance for the Hoops as a substitute in the 4-2 Premiership win over Ross County last weekend.
Starfelt will now test himself in the Spanish top flight with Celta Vigo, who are believed to have forked out around €5m (£4.3m) to recruit the centre-back.
The former Rubin Kazan man has put pen to paper on a four-year contract with the Spanish side until 2027 and has become Rafa Benitez's fifth signing of the summer transfer window after Jonathan Bamba, Carles Perez, Carlos Dotor and Manu Sanchez.
Starfelt could be in a position to make his Celta Vigo debut when they play host to Osasuna in their opening La Liga match of the 2023-24 campaign on Sunday.
The departure of Starfelt from Celtic comes just over two weeks after the Hoops signed centre-back Maik Nawrocki from Legia Warsaw for around €5m (£4.3m).
Nevertheless, Brendan Rodgers is believed to be keen to sign another central defender this summer, with Leicester City's Harry Souttar allegedly on his radar, although rivals Rangers are also said to be keen on the Australia international.