The deal allows Dier, 29, to link up again with former Tottenham teammate Harry Kane who moved to Bayern last August.
“As a child you want to play for a club like Bayern one day,” Dier said in a statement, calling his new side “one of the biggest in the world with an incredible history.”
Earlier on Thursday, Bayern coach Thomas Tuchel confirmed the signing was imminent, saying “he is in Munich”.
Dier has signed a short-term deal with his new employers which will run until June 30.
Dier, whose contract with Tottenham was also set to expire in the summer, arrives for a reported fee of four million euros ($4.38 million).
Often deployed as a centre-back, the versatile Dier, who spent a decade at Tottenham, can also play as a defensive midfielder or as right-back.
Tuchel has been looking for additional support in defence, particularly with Kim Min-jae set to miss several games as he represents South Korea at the Asian Cup.
Tuchel said he saw Dier as a “specialist in the position of central defender” and told reporters “first and foremost, this will free up Leon Goretzka for midfield”.
Kim’s absence means Tuchel has only two recognised centre-backs, Matthijs de Ligt and Dayot Upamecano, remaining in the squad.
Dier was born in England but grew up in Portugal, moving from boyhood club Sporting Lisbon to Tottenham in 2014.
He has made 49 appearances for England, scoring three times.
Eric Dier has only played four times for Tottenham this season.
Bayern sit second on the Bundesliga table, four points behind leaders Bayer Leverkusen, with a game in hand.
The German champions re-start their season after the winter break at home to Hoffenheim on Friday.
AFP