The 35-year-old former Real Madrid defender has agreed on a 12-month deal with the bold, promoted Ligue 1 side.
The 35-year-old defender, who spent three seasons at Real Madrid before his switch to Claudio Ranieri's side, completed his move on Tuesday. He will join Joao Moutinho and James Rodriguez, who recently completed a combined 70 million euro switch from Porto.
"I'm very happy to join Monaco and to be part of the new adventure. This is a new challenge for me," Carvalho told Monaco's official website.
Monaco, backed by Russian billionaire Dmitry Rybolovlev, is also reportedly close to finalizing a deal for Atletico Madrid striker Radamel Falcao, who passed a medical on Tuesday. Barcelona goalkeeper Victor Valdes is reportedly close to sealing a move as well.
Carvalho was in Jose Mourinho's Champions League-winning Porto side that beat Monaco 3-0 in the 2004 final.