The 29-year-old central defender joins the Blues after his contract expired at Burnley at the end of last month, having spent more than six personally outstanding years with the Turf Moor club.
“I'm excited to have joined Everton. It's a massive club. I'm really looking forward to the years ahead and I'm thankful for the opportunity that I've been given," Tarkowski told evertonfc.com.
“Speaking to the manager, it was very important to see what he wants from his players and his team, what he saw in me and why he wanted to sign me. Speaking to [Director of Football] Kevin Thelwell was also a factor. They both spoke about the ambition here which was really important for me.
“I'm an ambitious person, I want to achieve, I want to win things and I've come here to be successful.
“And then there are the Everton fans. The support they gave the team last season was incredible. You saw just how big the fanbase is. Despite a difficult season, Everton fans got behind their team more than ever.
“I think they are a massive factor about this club. Hopefully successful times are ahead and, with the talent we have in the squad, we can give the fans something they really enjoy."
Director of Football Thelwell said: “We are delighted to welcome a player of James' quality to Everton and believe he will be an excellent addition to our squad.
“The statistics show that James has consistently been one of the Premier League's most reliable defenders in recent years. Added to his playing attributes, his excellent leadership skills and experience will be a huge benefit, too.
“James is a player I've admired for many years and Frank was very keen to bring him to the Club. We look forward to him being a highly-valued member of our squad next season and in the years to come."