The 18-year-old completed a medical on Thursday and has signed a five-and-half year contract with David Moyes' side.
The right back has made 28 appearances for the Championship club since breaking into the first team at the end of 2011.
"I am very excited to be joining Everton," Stones told the club's official website.
"I've been very impressed with everything I have seen at Finch Farm already. Now the hard work begins."
Wigan was also understood to be interested in signing the defender on Thursday, but the move broke down with the Toffees interested.
David Moyes and the Goodison Park club completed the signing after a move for Twente midfielder Leroy Fer collapsed on Wednesday, despite a fee of around 8.5 million pounds being agreed with the Dutch outfit.