Thegoalmac reported on Wednesday that United were set to sign Valdes, who has been training at Carrington since the end of October as he stepped up his recovery from a serious knee injury.
The former Barcelona man becomes United's first acquisition of the January transfer window and will serve as back-up to David de Gea, who has 18 months left to run on his current deal at Old Trafford.
"It is a real honour to sign for Manchester United," Valdes told MUTV. "I would like to thank Louis van Gaal and the club for allowing me to do my rehabilitation and to train with the team at the Aon Training Complex.
"From my short time here I can already see this is a very special club. I worked with Louis van Gaal during my time at FC Barcelona and to have the opportunity to work with him here at Manchester United is a dream come true."
Boss Louis van Gaal added: "I am delighted Victor has signed for the club. Victor is a very experienced goalkeeper and his record speaks for itself.
"I have said on many occasions that Manchester United will always be interested in the best players. Victor has remained very professional throughout his rehabilitation from injury and has been very impressive during his training sessions with the first team over the past weeks.
"He joins the club as the number two goalkeeper and is a great addition to the first team."
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