Cazorla, who played 81 times for Spain and won two European championships, had previously confirmed he would be leaving Villarreal at the end of the La Liga season.
There was speculation that the 35-year-old midfielder could rejoin Arsenal, where he played from 2012 to 2018, as a member of manager Mikel Arteta's coaching staff.
But Cazorla will prolong his playing career and will be reunited with former international colleague Xavi at Al Sadd. Xavi recently signed a one-year extension to stay on as Al Sadd's manager even as speculation continues to swirl about a possible move to Barcelona.
Apart from success at international level, Cazorla also won two FA Cups with Arsenal and is widely recognised as being one of the best Spanish playmakers of his generation, having also been named his country's Player of the Year in the 2006-07 season.
Al Sadd are the current champions of the Qatar Stars League and also hold the record for most titles with 14. They broke a six-year drought last year and won their domestic league as Xavi captained them to victory before taking over as manager.
On the Asian stage, Al Sadd continue to hunt for their first AFC Champions League crown since 2011 despite regularly being among the favourites each season.
Al Sadd boast a host of Qatar internationals including reigning AFC Player of the Year Abdelkarim Hassan and rising star Akram Afif, who previously featured in La Liga for Sporting Gijon. They also have established foreign players in Baghdad Bounedjah, Jung Woo-young, and now Cazorla.