The 30-year old French-born Ivory Coast international has been snapped up by the Hammers in what is a massive coup for the Championship club.
Demel, who has signed a two-year deal, admitted his delight at joining the East London club after a decade in Germany following a development stint at Arsenal.
"I am very excited to join West Ham. I want to help the team go back to the Premier League. This is my goal,” he told the club’s official website.
"I have some friends here already like Freddie Piquionne and Carlton Cole, and London is a great city. I am very happy to be here. I know the players here want the same as me. Everyone is determined to make it a successful season and this is a great opportunity.
"I had ten years in Germany and I won the title. But it is time to change and show what I can do in another country. I will do my best.
"It is a good stadium and I am also looking forward to the future. I would like to go to the new stadium with West Ham. Something big is happening here and I want to be a part of an exciting time in the club's history. I know the fans are very passionate."
emel becomes Sam Allardyce's 12th summer signing following the captures of Abdoulaye Faye, Kevin Nolan, Joey O'Brien, Matt Taylor, George McCartney, John Carew, Sam Baldock, Brian Montenegro, Papa Bouba Diop, David Bentley and Henri Lansbury.