Lugano, 32, has signed a two-year deal at The Hawthorns after two bench-ridden seasons at the Parc des Princes.
The Uruguay international, who joined PSG from Turkish giants Fenerbahçe S.K. in the summer of 2011, spent the second half of last season on loan at Málaga CF.
“I am very pleased to join West Bromwich Albion for the next two years,” Lugano said via Twitter.
“I’m doing something that has been missing in my career, playing in the Premier League, without doubt the most beautiful and competitive league in the world.
“The challenge is to match what West Bromwich achieved last season and trying to go a step further to reach European competitions.”
Lugano made just 11 league appearances for Málaga last term, but remains an important player on the international scale for Uruguay.
Leverkusen sign Emre Can from Bayern
Bayer 04 Leverkusen have completed the signing of highly-rated Germany youth international midfielder Emre Can from FC Bayern Munich, according to the European champions’ official website, www.fcbayern.telekom.de.
Can, 19, one of Europe’s premier young talents, has put pen to paper on a four-year deal at the BayArena. The deal also includes a buy-back option.
“Emre Can is one of the great talents of the German football,” said Bayern CEO Karl-Heinz Rummenigge.
“We want to ensure this step that he gets enough match practice, as before him as already Toni Kroos Leverkusen, VfB Stuttgart and Philipp Lahm and David Alaba in Hoffenheim.”
Meanwhile, Leverkusen CEO Wolfgang Holzhauser added: “Emre Can is one of the big midfield talents in German football. We are profoundly convinced he will be an important player for us in the years to come.”
The 19-year-old midfielder will get plenty of opportunities to impress at Leverkusen this upcoming season, with Löwen having qualified for the UEFA Champions League after finishing third in the Bundesliga last term.
Two players, Can and Mario Gomez, have left the Allianz Arena this summer, but Diego Contento and Luis Gustavo continue to be linked with summer exits as Pep Guardiola looks to add his signature to the side.
On the other side of things, the European champions have added the likes of Jan Kirchhoff and Thiago Alcântara to their squad.
Additional players to watch at Bayern next season are Mitchell Weiser and Pierre Højbjerg. Weiser, 19, has enjoyed a sensational pre-season with the first-team and could be integrated into the side by Guardiola in 2013/14.