The keeper, who played more than 11 years at Tottenham Hotspur, is the most capped player in the history of the French national squad, which won the 2018 World Cup and lost to Argentina in the 2022 World Cup final.
Lloris, who also had stints at Nice and Lyon, decided he wanted to continue his career in California.
"I always thought about coming to MLS one day or another. I was waiting for the right moment for me," said the former French captain.
"I knew that MLS was growing quickly. Football, or 'soccer,' is becoming more important. There are more expectations from fans in the country. The level is increasing every year."
Lloris, a former doorman, had said at the end of December he would transfer to LAFC, which won the 2022 MLS crown and lost last year's final to the Columbus Crew.
In a city whose sports teams boast such stars as NBA legend LeBron James and baseball's Shohei Ohtani, Lloris will add sparkle for LAFC.
"Los Angeles is a city of stars. It's part of our program and our model to bring them in," said LAFC manager John Thorrington.
"It's rare to be able to sign a world champion captain. We jumped at the opportunity when it presented itself."
