The England international midfielder joins the Premier League champions for an undisclosed fee, which reports place at between £15 million and £18m, including a chunk in add-on payments.
The Toffees accepted a bid from Roberto Mancini's side on Sunday and Rodwell completed a medical while his new team were defeating Chelsea 3-2 in the Community Shield.
"It is an honour to be signing for the champions," the 21-year-old, who will wear the No.17 shirt, told the official Everton website.
"I relish the opportunity of playing with some of the best players in the world and continuing my development.
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"The hard work starts today as I start to help contribute to the club winning more silverware.
"I have a special relationship with the [Everton] chairman, Mr [Bill] Kenwright, who did not want me to leave but this was an opportunity I could not refuse," Rodwell continued.
"I would like to place on record my thanks to everyone at Everton Football Club. The manager [David Moyes] has been brilliant for me and helped make me the player that I am today.
"I would like to place on record my thanks to him and all the coaching staff and players who have worked with me since I joined the academy as a seven-year-old.
"Finally I would like to thank all the fans who have been amazing during my years at Everton. I have enjoyed every minute of my time there and I wish everyone at the club the best of luck for the new season and beyond."