Toral, 22, arrived at the Emirates Stadium in 2011, signing for the club from Barcelona along with fellow La Masia prospect Hector Bellerin. While the latter has gone onto establish himself as a first-team regular under Arsene Wenger, Toral has failed to force himself into the manager's plans and has spent the last three seasons away from north London on loan.
Having had spells in the Championship with Brentford and Birmingham City, the midfielder returned to Spain last summer to join Granada before he was recalled by Arsenal in January. He was reunited with former Bees manager Mark Warburton at Rangers in the Scottish Premiership for the second-half of the 2016-17 campaign, but returned to Arsenal this summer where he was again informed he was not part of the first-team set-up.
He has now signed a three-year deal with the Tigers with the option of a fourth.
Wenger has promised to trim what he perceives to be a bloated Gunners squad this summer with Wojciech Szczęsny, Gabriel Paulista, Carl Jenkinson, Emiliano Martinez and Yaya Sanogo among those to have been moved on so far.
"To be honest, the number is too high," Wenger said of his squad after the Community Shield victory over Chelsea. "We will let some players go. Too much competition for places is detrimental, but not enough competition for places is detrimental as well."
Lucas Perez is expected to leave the club before next week's transfer deadline day and is close to sealing a return to Deportivo La Coruna for a reported fee of £14m. Aston Villa boss Steve Bruce has confirmed his side's interest in taking Jack Wilshere on loan, although he expects the midfielder to favour a Premier League side, while Kieran Gibbs remains linked with moves to Newcastle United and Turkish giants Galatasaray.
Wenger expects more outgoing deals over the next seven days, although he has not ruled out further additions to his squad.
"Both can happen. It depends how many players will go to see if we can bring one more in. We are on alert in the last seven days. Everybody gets agitated and phones ring more often than before. Sometimes you have to share the work in the final day because you have some cases going out and some coming in. The last two days are always very hectic."