The 19-year-old has made 33 league appearances for the Buenos Aires club this season after making his breakthrough during the previous campaign.
A host of clubs, including Udinese, had been linked with a bid for De Paul, but he will move to La Liga for the start of 2014-15.
Valencia confirmed they would pay Racing €6.5 million for the attacking player, providing he passes a medical in the coming days.
"He's a proven player in Argentina despite his youth, he was captain of his team and is overflowing with talent," Valencia general manager Rufete said.
"We believe Rodrigo has everything (required) to succeed in Valencia and European football."
Valencia coach Juan Antonio Pizzi also expressed his delight at signing De Paul.
"Rodrigo is the player with the biggest impact to come out of Argentina in the last five years. This is great news for Valencia," he said.
