Awat joins Yossi Benayoun and Ilan Bachar on the Primera outfit's books, the only European club outside of Israel with three Israeli players on their books.
One stipulation Racing have implemented in the shot stopper's contract though is the right to terminate deal after one year, should things not work out for both parties.
Not since Bonni Ginzburg appeared for Rangers during the 1989/90 season has an Israeli keeper played overseas, but Awat says he believes in his ability to make himself first choice at El Sardinero.
"I have been dreaming about playing in Europe for a long time, and I believe in my ability to be Santander's first choice keeper in the Spanish first division, which is one of the best leagues in the world."
Awat arrives in Spain on the recommendation of fellow countryman Benayoun, after the club released two goalkeepers, and says his arrival can only be beneficial to both him and Bachar.
"When I realised that there was an opening for a keeper, I decided to recommend Dudu Awat, who is a great goalkeeper and can, without a doubt, fight for the number one jersey," said Benayoun.
"The signing of another Israeli player can only help me and Ilan Bachar."
