The 23-year-old has signed a five-year deal after passing a medical.
He told West Ham's official website: "It's my dream come true to play for West Ham and play in the Premier League.
"At last I am able to sign. After the Euro 2008 Championship I spoke to West Ham who had expressed an interest but I had to be sure it was the right thing for everybody.
"I have now made my decision and am looking forward to being part of this side and playing in the English league."
West Ham's chief executive Scott Duxbury insists the signing of Behrami shows that reports of the club struggling to find the finances to strengthen the squad this season are nonsense.
He said: "Valon is a player who will be a valuable addition to the squad as we aim for a successful season ahead.
"His signing also indicates the club's positive ambitions. Contrary to some reports we are fully committed to strengthening the playing staff.
"There will not be a mass exodus and fans can be assured we are working as hard as always to ensure high-calibre competition in all areas of the team."