The 22-year-old is the latest arrival at Saint James' Park following Newcastle's takeover by a Saudi Arabian consortium last year.
The Magpies have paid an initial £31m fee for Botman, who was also the subject of interest from AC Milan.
Newcastle, who finished 11th after a tough start last season, are looking to break into the Premier League's elite group and Botman is happy to be part of the journey.
"I'm really happy – delighted – and I can't wait to start this new adventure," Botman, who penned a five-year contract, told Newcastle's official website.
"This is the best day of my life, to sign a contract with Newcastle United. It's a day I've worked hard for and I'm very excited.
"Newcastle had a long-term plan to get to the top, for both me and for the club, and they play in the Premier League which is the best league in Europe.
"The whole package is just perfect. I'm looking forward now to meeting the fans and also my new team-mates."
Newcastle manager Eddie Howe added: "I'm delighted Sven is joining us. He is technically very good, physically very good and has a great attitude."
"At 22, he already has solid experience at the top level but he is at a great age to grow with this team.
"I am looking forward to getting to work with him and seeing him with his new team-mates."
Botman joined Lille from Ajax Amsterdam in the summer of 2020, making 79 appearances.
He helped Lille win the Ligue 1 title in the 2020/2021 season.
Botman is yet to win a senior cap for the Netherlands national team.
Newcastle have already signed Matt Targett permanently from Aston Villa following a loan spell and goalkeeper Nick Pope from relegated Burnley.
