Ramos, 35, left Real Madrid when his contract expired on June 30 after failing to agree an extension, bringing an end to 16 years at the club.
"I am very happy to join Paris Saint-Germain," Ramos said.
"This is a big change in my life, a new challenge and it's a day I will never forget. I am very proud to be a part of this ambitious project, to be a part of this squad with so many great players. Paris Saint-Germain is a club that has already proven itself at the highest level. I want to continue to grow and improve at Paris and help the team to win as many trophies as possible."
Ramos had wanted a two-year deal. His wages at PSG are set to be lower than what he was earning in Spain and what he would have earned had he stayed at the Bernabeu.
The defender claimed he "never wanted to leave Real Madrid" and said that after drawn-out negotiations, he had wanted to accept a one-year deal, only to be told the club's offer had been withdrawn.
"It wasn't a financial problem. They offered me one year, I wanted two," Ramos said at his Real Madrid farewell news conference on June 17. "In the latest conversations I accepted the offer with a pay cut, and I was told there was no longer an offer. It had an expiry date and I didn't realise. It surprised me."
Nasser Al-Khelaifi, Paris Saint-Germain chairman and CEO, said: "Today, Paris welcomes one of the greatest players of our era. We are delighted to announce that Sergio Ramos has joined us. Sergio is a complete footballer, one of the best defenders in the history of the game.
"He is a born competitor, a leader and a true professional. His vast experience and ambition is in perfect synergy with those of the club. I am proud to see him in a Paris Saint-Germain jersey and I know our supporters will reserve a fantastic welcome for him."
ESPN reported that Ramos was considering approaches from PSG, Manchester City and Bayern Munich and was keen to choose a destination sooner rather than later, with family considerations being an important factor in his decision-making.
"I haven't thought about any team at the moment," Ramos said last month. "But it's true that since January, when I was free and on the market for contractual reasons, we've had calls to my brother [agent Rene Ramos] from interested clubs. We'll look at a good option for me."
Ramos began his career at Sevilla and signed for Real Madrid in 2005 aged 19, going on to become one of the most important players in the club's history.
The centre-back made 671 appearances for Madrid, scored 101 goals and became club captain in 2015 after the departure of Iker Casillas. He won 22 trophies with Madrid including four Champions League titles -- scoring a crucial 93rd-minute equaliser in the 2014 final against Atletico Madrid, as well as the opening goal in the 2016 final -- five La Liga titles and two Copa del Rey titles.
He was also a part of Spain's most successful national team ever, winning Euro 2008, the 2010 World Cup and Euro 2012 as La Roja became the first squad to win three successive international tournaments.
Ramos will look to regain his best form in 2021-22 after his contribution in 2020-21 was limited by a series of injuries. He made 15 La Liga appearances last season -- by far his lowest tally as a Real Madrid player -- with just two of them coming in 2021, and as a result was left out of Spain's Euro 2020 squad by coach Luis Enrique.