The youngster rekindles a working relationship with one of the game's most innovative and intelligent managers and goes into a team crammed full of stars currently playing the most successful brand of club football.
More immediately, however, his choice could be seen as a little confusing and could well jeopardise his chances of featuring at World Cup 2014.
For as suffocated as he was by the likes of Xavi, Andres Iniesta and the considerable wealth of talent at Barcelona's disposal, Bayern Munich boast similarly high-calibre players in Bastian Schweinsteiger, Toni Kroos and Javi Martinez, just to mention a few.
Finding match action in such a congested area of the field may prove troublesome, initially, and while Thiago seems too talented a prospect to spend a long period on the sidelines, will he break through quickly enough to earn a trip to Brazil? That seems doubtful at the moment.
In whichever formation Bayern pick, against the top sides the likes of Kroos and Schweinsteiger are almost certain to start, and that's before the roles of Martinez, Mario Gotze and Thomas Muller are even considered.
Despite his form in Spanish youth teams, Thiago's still only collected three national team caps and is far from a certainty to win selection. In short, he needs a full season to continually flaunt his talent and force his way in, which he seems unlikely to get in his first year at Bayern.
His devastating showings at the European Under-21 Championship demonstrated just how much of an elite prospect he is. A hat-trick in the final topped off an almost faultless competition for the youngster, who continually displayed exemplary skill, touch and vision with the ball and intelligent movement without it.
All European teams would naturally covet his talents, but had he chosen Manchester United as his next destination he would surely stand a far better chance of making the World Cup.
As the English champions enter a transitional phase post Sir Alex Ferguson they are crying out for midfield reinforcements. Paul Scholes is now retired, again, and Anderson, Tom Cleverley and Ryan Giggs are unlikely to provide the consistency needed alongside Michael Carrick.
Had Thiago decided to head to English shores he would have been far more likely to not only feature early on, but become a driving force in his new side.
While the Premier League's leading clubs may be a step below Bayern, at present, the standard of the top six is superior in England, meaning Thiago would have had greater opportunities to impress during a greater amount of crunch battles.
Frequent recognition of his play would have then made a return to the Spanish squad a far more likely scenario.
If moving to Bayern was genuinely his dream destination there's no reason why a couple of years in England could not have led to another transfer. The Germans have shown their commitment to landing their desired target, whatever the fee, and United would have ended up making a handy profit over a short period of time.
There's no doubt Bayern Munich are the current leaders of European football and nobody can begrudge a player wanting to join up with the European champions. However, in the short term at least, Thiago might end up ruing this decision, especially if he ends up missing out on a World Cup place due to a lack of action.