The former Bordeaux left-back is moving to the Stade Geoffroy-Guichard until the summer but with the possibility of a permanent deal should his return to Ligue 1 go well
The twice-capped France international failed to settle in the Ukrainian capital after arriving from Bordeaux last summer and is delighted to be back in Ligue 1.
"I am very pleased to join Saint-Etienne. This is a club that has a lot of ambition for the end of the season," Tremoulinas declared to the club's official website.
"This is a great challenge for me, both collectively and individually."
The 28-year-old left-back joins Les Verts initially on loan but it is believed that the deal includes the option of a €4 million (£3.3m) permanent transfer in the summer.
With the Ukrainian league still on its winter break, Dynamo have not been in competitive action since the Champions League group stage ended at the start of December.
However, Tremoulinas does not feel that the lack of match practice will cause him any problems, though he is keen to resume playing.
"Physically, I feel fine," he insisted. "I'm coming from a big winter training camp with Kiev in Spain."