Here, ManUtd.com runs the rule over the Reds' first signing of the summer after he penned a five-year deal...
What sort of a player is he?
He's a quick, aggressive right-back who has a real willingness to defend. In that respect, he's not a typical South American defender in terms of wanting to be a forward player and joining in attacks as a winger.
What are his strengths?
As well as his desire to defend, he is a composed individual and nothing seems to faze him. Overall, he's a no-nonsense defender who reads the game well and uses his intelligence.
What can he improve on?
His pace allows him to get forward to join attacks quickly but his attacking work is probably the area he will aim to develop most at United.
Why has he not been playing regularly for Penarol?
Penarol manager Jorge Da Silva arrived in February 2012 and brought in a number of players to his squad. This limited Varela’s first-team opportunities.
When did he catch United's eye?
Playing in the Under-20 World Cup qualifiers for Uruguay in Argentina. He was playing with team-mates he was not familiar with and yet still displayed a good understanding of the game. Despite a tough schedule in very hot temperatures, his stamina and strength shone through while other players wilted.
How did his trial period at Carrington pan out?
He was with the first team for 10 days or so at the end of the season. It was a unique trial in many ways because he trained with the first team during his entire spell. Obviously, if you're not up to