The 28-year-old World Cup winner became a free agent after leaving Borussia Dortmund at the end of last season.
PSV confirmed the deal for the attacking midfielder shortly after he was spotted at the Philips Stadion to undergo a medical on Tuesday.
Gotze, who scored the winning goal in the 2014 World Cup final, says he chose PSV ahead of numerous other offers.
“I had a lot of offers this summer but I am a man of feeling and make my own decisions,” Gotze told the club’s website.
“I feel I am ready for a very different challenge and I am confident that this should be a very comfortable transition for me. Continue reading