The Spanish left-back has signed from Leganes in a deal reportedly worth £10.7million.
According to the 'Daily Mail' Borussia Dortmund made a late bid to try and sign Rico, but the players' preference was to play in the Premier League.
Rico is expected to come in and compete for a place in the side with Charlie Daniels, and his addition to the club will add some depth to the side.
Howe, speaking to the Bournemouth FC website said: "Diego is a player we have been tracking throughout the summer, and although we had to be patient, it's great to finally be able to call him an AFC Bournemouth player."
"He's a really nice footballer and someone who will fit our philosophy and style of play."
"Diego is fast, physical, aggressive in attack and aggressive defensively. He takes an excellent set piece and has a powerful left foot."
"Once he gets used to the way we play, we believe he can be a real force for this football club."
Rico also spoke to the club website, and told them: "I'm very happy to be here and would like to thank everyone at AFC Bournemouth for making me feel so welcome."
"This is a new step for me in my career and from my heart I can say I am truly excited to be here and looking forward to the future."
"I have heard so much about the manager. I learned he is very professional and has a great philosophy on football and I can see that is true from the short time I have met him so far."
"I am very excited to be a Bournemouth player."