Atletico will pay €25m for Cunha with an additional €5m in variables, sources told ESPN. The 22-year-old will provide competition for Luis Suarez in Atletico's front line, the club described their new signing as "a versatile player who can play in various positions -- as a striker, winger or even attacking midfielder."
Cunha impressed for Brazil in their gold medal win at the Olympic Games in Tokyo this summer, scoring three times.
He joined Hertha in January 2020 from RB Leipzig and scored seven goals in the Bundesliga last season.
Atletico coach Diego Simeone had been keen to add a forward to his squad for the defence of the LaLiga title won last season, after bringing in midfielder Rodrigo De Paul earlier this summer.
"When we plan a squad, it's to have two players in each position. Obviously we need a player," he said on Sunday when asked about landing a striker before the transfer window closes. "We'll look for what can arrive."