The 75-year-old passed away at hospital in Madrid.
He was working as a missionary in Liberia when he became ill.
Spain sent an aircraft to the country to pick the priest up and take him home for treatment last week.
He was being given experimental treatment for the virus which it's reported had aided the recovery of two American missionaries.
Fr Pajares is the first European to die from the virus.
Yesterday a man who worked with Fr Pajares died of the virus.
George Combey was working as a Catholic missionary in Liberia alongside the priest.
Mr Combey died in ELWA Hospital in Monrovia, Liberia, after falling ill with the virus that has killed more than 1,000 people in West Africa.
It's thought the missionary didn't know he was infected when his friend, Fr Pajares, left, so he decided to stay in Liberia to continue his work.
Elsewhere three American missionaries have been placed in isolation after they returned to the US from areas of West Africa in the grip of an Ebola outbreak.
They were working for Christian charity SIM USA in Liberia before being flown home to Charlotte-Douglas International Airport.
Bruce Johnson, president of SIM USA, said: "We are excited to have these three missionaries safely back in the U.S.
"They are all healthy and in good spirits, and we want to express our gratitude to all those involved in the effort to bring them back, and for the prayers of countless people around the world."
After being seen by medical experts they were cleared as not showing signs of the virus but will still be placed in isolation for several days.
Among the three is David Writebol, husband of SIM missionary Nancy Writebol, who is being treated for Ebola at Emory University Hospital in Atlanta.
The other two missionaries are SIM doctors who haven't been named to protect their privacy and that of their families.
Dr. Stephen Keener, Mecklenburg County medical director, said the quarantine is just a preventative measure: "Quarantine is a public health measure to protect the public that requires healthy people who were exposed to a disease to be prevented from contact with others until it is certain that they are not infected".
Bekah Legg from Christian charity Compassion told Premier's News Hour the organisation is launching a programme to teach people about the illness: "One of the biggest problems with Ebola is a lack of education because the truth is it's a disease that's relatively containable if you take the proper precautions.
"Across the region we're seeing there are real problems with people not really understanding the disease."
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