The Ivory Coast international will begin training with the rest of the squad on July 21. He starred in this summer's World Cup in the extremely tough Group C which also featured Argentina and Holland.
The 25-year-old, a graduate of the ASEC Abidjan academy that has developed many of the current generation of Ivory Coast internationals, joined RC Genk of Belgium in 2000 and was a member of their title winning team of 2002.
After four years in Belgium he made the switch to France and went on to make 66 appearances for St Etienne, quickly becoming recognised as one of the leading midfield talents in Le Championnat.
"Didier was regarded by a lot of people as one of the best midfield players going into the World Cup and he proved that in the group stage," said Manager Martin Jol. "A lot of clubs were after him, we had to compete for his services and he is a very good signing."
Sporting Director Damien Comolli, who also recruited Didier from RC Genk during his time at St Etienne, added: "He is a player I know well and I believe he is an excellent signing for us. Didier has had two good years in France and an impressive World Cup.
"Martin was well aware of him also and he was one of the first players he talked to me about when I arrived."
The player himself said the prospect of linking up with the hugely promising group of players already at the Club proved a great attraction for him when it came to determining his future.
"I am very proud to come here and I think it is a great club," said Didier. "I am extremely happy because I think there are a lot of really good players here and I am glad to be joining them.
"The core of the team is very young and we can build for the long term. This is something which really attracted me to the club."
We are delighted to announce the completion of the signing of midfielder Didier Zokora Degui from St Etienne.