The 30-year-old defender has signed a three-year contract with the French giants.
He said: “I am very happy to arrive in Paris. It is a great joy and a new stage in my career knowing that I have just arrived at a club that has big ambitions.
“PSG is the most iconic French club. My goal is to help them get as high as possible.”
He continued: “In all the clubs I have played for, I was lucky in one way or another, to leave a small trace and it makes me quite proud.
“By changing the club, I start from scratch: it’s a new challenge. PSG is a club in search of titles, including the league.. This is a great challenge, not to mention that we are equipped to do something in the Europa League.
“Being competitive in every way – this is something that was missing in my career.”
When asked why he decided to join PSG, Lugano said: “Throughout my career I was fortunate to have been approached by many clubs. I am proud because it means that I kept a good level of play.
“PSG’s project made the difference, both on the field and off. France is a beautiful country, where I cannot wait to live.”
“We are very pleased to welcome Diego to the club,” PSG sporting director Leonardo said.
“He arrived in Paris with his experience and what he has done in recent years is already a great career.
“He is a player with a lot of talent and leadership – two qualities that we will be essential for a successful season.”