Karanka explains Bilbao move
Available on a free transfer, German coach Jupp Heynckes moved quickly to head off potential suitors and restructure his side from the back.
At 28, Karanka is hitting his prime and is a useful acquisition for the Basque side that have seen the loss of Ismael Urzaiz in this off-season.
"It has been much speculated about my situation," said Karanka.
He added: "I have received many offers through my agent and three months ago I had one from a club with which no coach in the world would have spoken about, but I believe in this idea.
"I identify with Athletic, with the philosophy of the plans of the president inspite of the difficulties we will face."
Heynckes added: "The transfer of Karanka is like the foundation of a new house, with him we are going to win as far as professionalism, personality and presence when he puts on the shirt.
"He is a good player, a wonderful person and will serve as a reference for the young people."