The effigy was hung by the neck from a highway in Madrid on the morning of the quarter-final Copa del Rey clash between the two clubs on January 26. A banner was also stuck to the bridge with the message 'Madrid hates Real'.
Spanish police said on Tuesday that four people have been arrested following a hate crime investigation. The act was condemned by both Real Madrid and Atletico, while La Liga also issued an official statement.
"La Liga strongly condemns acts of hatred and intimidation against Vinicius Jr," the statement read. "La Liga, as in the past, will press for an investigation into the matter by relevant state security forces and bodies, seeking convictions for those responsible and requesting the most severe sentences."
Vinicius has been the target of racist abuse throughout the season, with the latest incident taking place during Real's visit to the Mestalla to face Valencia on Sunday. The match was stopped for five minutes after Vinicius identified a group of home fans that were aiming racist chants and gestures in his direction.
The Brazilian winger considered leaving the pitch but did end up finishing the match - collecting a red card in stoppage-time - and released a strong statement on social media criticising La Liga and Spanish authorities later in the evening.
"It wasn't the first time, not the second and not the third," Vinicius wrote. "Racism is normal in La Liga. The competition thinks it's normal, so does the Federation and the opponents encourage it. I am so sorry."
La Liga has filed nine criminal complaints over racist abuse of Vinicius across the last two seasons but most of them were shelved by prosecutors. Real lodged a fresh hate crime complaint after the ugly scenes at Mestalla, while Luis Rubiales, head of the Spanish football federation (RFEF), has also spoken out in support of Vinicius.
"We have a problem in our country of behavior, education and racism. [Vinicius] is more right than we think," said Rubiales. "The goal is for all footballers to be able to say that racism is no longer a problem."