"Paris St Germain is delighted to announce the transfer of Brazilian international David Luiz from Chelsea for the next five years," the club said in a statement.
The 27-year-old defender from Sao Paulo, who started for hosts Brazil in their 3-1 win over Croatia in the World Cup opener, is reported to have left Stamford Bridge for an amount ranging between 40 to 50 million pounds.
The move will see Luiz link up with his national teammate and centre half partner Thiago Silva, who was part of the PSG side that was knocked out of last season's Champions League by Chelsea.
"I hope we will be successful in every competition we play in. I want to win the French League, all the Cups and the Champions League, which is every player's dream. I want to win it a second time because I won it with Chelsea in 2012. Rest assured we will be doing everything we can to give the supporters the chance to celebrate a European triumph," Luiz said in a statement release by the club.
Winner of the Champions League in 2012 and the Europa League in 2013 with Chelsea, and the Confederations Cup in 2013 with Brazil, David Luiz is a powerful, physical defender.
The latest signing surpasses the 36 million pounds PSG paid AC Milan in 2012 for Thiago Silva.
Transferred to Benfica in 2007, Luiz quickly made a name for himself in the centre of defence, and was named the Portugal league's player of the year in 2009-10.
Former England international Rio Ferdinand was the most expensive defender after moving from Leeds United to Manchester United for 29 million pounds in 2002 but that fee has since been surpassed by Silva and now Luiz.