The 29-year-old reunites with Carlo Ancelotti, who was Napoli’s head coach for one-and-a-half years, in an initial deal of £25 million.
Everton endured a difficult 2019/2020 season but their campaign was somehow salvaged by the arrival of Ancelotti following the dismissal of Marco Silva, and the Merseyside-based club are looking to bolster their squad for the upcoming season.
The former Vasco da Gama man becomes Everton’s first summer arrival but the Toffees are said to be close to signing Real Madrid’s James Rodriguez and Abdoulaye Doucoure from Championship side Watford.
Allan was previously linked with the likes of Atletico Madrid and Borussia Dortmund, but the involvement of Ancelotti saw the Premier League side beat other potential suitors to secure his services.
"It is a real pleasure to sign for Everton. I am immensely happy to be here," the Brazil international told evertontv.
"I hope, like I have done in my entire career, I contribute with my performances together with my teammates and that I put in some great games, great performances and win important things.
Allan joined Napoli from Serie A rivals Udinese in 2015 and spent five years at the Stadio San Paolo, winning only the Coppa Italia.
He featured 212 times for the Partenopei scoring eleven times and providing 16 assists.