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With Chelsea struggling to complete a deal for Everton centre-back John Stones, reports had emerged in the British media that manager Jose Mourinho was keen on Tunisia international Abdennour.
But the 26-year-old was announced as a Valencia player on Saturday, with Abdennour signing a five-year contract with the La Liga club.
Abdennour will step into the shoes of Otamendi, who departed the Mestalla for Manchester City on August 20.
"I chose Valencia CF out of all the offers I received, because it is a big club in Spain and Europe," Abdennour said in a statement on Valencia's website.
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"I had no doubts. I am happy to be here and to be part of an ambitious and serious project."
The Tunisian joined Monaco midway through the 2013-14 season and played 24 Ligue 1 matches for the principality-based club, after 77 games with Toulouse from the start of the 2011-12 campaign.