The 19-year-old Croatia international had been linked with a temporary move to Portugal, but opted to remain in Spain in order to get more first-team football.
Halilovic's agent had revealed on Wednesday that he was on his way to the newly-promoted side and now both clubs have confirmed the news.
Halilovic broke through the Dinamo Zagreb youth system to become a key player for the first team before joinig Barca in summer 2014.
He featured in one game for the senior side last term in the Copa del Rey against Elche, spending the majority of the campaign in the Barca B side.
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