Father Manuel Garcia Viejo was seriously ill at Carlos III hospital after being flown home from Sierra Leone.
The 69-year-old was working as a director of the San Juan de Dios Hospital in Lunsar, where it is thought he picked up the illness.
He is the second Spanish priest to die from Ebola.
Seventy-five-year-old Father Miguel Pajares was the first European to die of the disease, despite receiving a dose of the experimental drug ZMapp.
Ebola is thought to have infected more than 6,000 people in West Africa and to have killed almost 3,000.
The World Health Organisation believes around 200 of the dead are medical workers.