The former AC Milan shot-stopper becomes the Parisians' third free summer signing after Giorgino Wijnaldum and Sergio Ramos from Liverpool and Real Madrid respectively.
Donnarumma, 22, after 6 years at Milan will now don the shirt of French giants PSG, signing a five-year deal with club.
"I am very happy to be part of this great club," he said.
"I feel ready to take on this new challenge, and continue to grow here.
"With Paris, I want to win as much as possible and give joy to the supporters."
Donnarumma joins PSG after being named the player of the tournament as Italy won Euro 2020 on Sunday.
Donnarumma clearly declared his intention of taking another challenge outside Italy, bidding farewell to the Rossoneri earlier this week after his contract expired.
AC Milan being in the known of a possible move for Donnarumma reacted swiftly to find a replacement for the Italian goalkeeper as they brought in Lille goalkeeper Mike Maignan.
Nasser Al-Khelaifi, PSG president was pleased for the acquisition of the highly-rated goalkeeper to the club and congratulated him on his Euro 2020 victory with Italy.
"Gianluigi will receive a warm welcome from everyone at the club, including his team-mates, our staff and all the Parisian supporters."
He amassed for himself 251 appearances for Milan in all competitions having earned his debut at the age of 16.
Donnarumma played a part in AC Milan's return to Champions League football after a seven-year absence.
PSG have also recruited former Dortmund right-back Achraf Hakimi, from Inter Milan on a five-year deal.
Donnarumma's move to PSG will see him face a tough competition with Keylor Navas, for the number one spot at the club.
