A statement released by the French capital club said that the 28-year-old had signed a contract at the Parc des Princes until June 2017.
"I was won over by the ambitious project at Paris Saint-Germain and I can't wait to join this exceptional squad and help the team reach its objectives in france and in Europe," Cabaye said, who passed a medical earlier in the day in Paris.
PSG president Nasser Al-Khelaifi added: "The transfer of Yohan Cabaye is further proof of the club's capacity to attract the best French and overseas players."
Reports in France indicate that PSG will pay €20m for the player, plus a potential €3m more in bonuses.
PSG coach Laurent Blanc is a confirmed fan of Cabaye having given him his France debut in 2010.
Cabaye joined Newcastle in 2011 from Lille for £4.3m, with whom he won the Ligue 1 and Coupe de France double in his last season.