The right-back, who is out of contract at League One club Southampton, will officially join the Owls on July 1.
Otsemobor, who has made a total of 218 career appearances, said: "It goes without saying they are one of, if not the biggest club in the division."
He added: "The most important thing for this club is to get out of this division as soon as possible and myself and the other new recruits can hopefully help push towards that and get the rewards over the season."
Owls boss Alan Irvine added: "I've known about Jon for a long time, since he was a youth-team player at Liverpool. He was a centre-half at that time but has since developed into a very attack-minded full-back.
"He's a good athlete, quick, strong and knows what it's like to be at a big club having spent his early years at Liverpool and then going on to play for the likes of Norwich and Southampton. He certainly ticks a lot of boxes."