Winger Lores has completed the move from Defensor Sporting Club and signed a five-year contract this afternoon.
"I am enthusiastic at the idea of wearing the Rosanero jersey," he told the official club website.
"This is an important and extraordinary opportunity for a young player like me. Palermo are a great side and my fellow countryman who play in Italy told me they are among the best teams.
"I've also heard great things about the city and the fans. It is an honour to be here.
"I can't wait to play alongside Abel Hernandez, as he is a real hero for me and other Uruguayans.
"I also particularly admire Javier Pastore, who is phenomenal. It would be fantastic for me to play with these two champions.
"I will work hard and grow day by day to earn my place in the starting XI."