Sevilla and Rayo Vallecano had shown interest, but he chose América after what was described as an attractive proposal.
He is expected to travel to Mexico this week for medical and fitness tests, then join training for the remainder of the Apertura 2026.
Depending on his condition, his debut could come on 12 September against Cruz Azul, or on 19 September when América face Chivas.
Álvarez is a left-footed attacking midfielder who has spent most of his career at Levante, and was a key figure in their promotion to the top flight.
He is noted for precise attacking passes and an excellent eye for through balls. His primary role is on the right of midfield, though he has also operated centrally.
The move is viewed as a major addition for Las Águilas, with the 23-year-old bringing European experience and qualities not currently in the squad.
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