The 21-year-old Ivory Coast international has arrived at the Parc des Princes to bolster PSG's defensive ranks, filling the void left by Christophe Jallet, who joined Lyon earlier on Wednesday.
Aurier was one of the few bright spots for the Ivory Coast at the recent World Cup, with the African nation exiting at the group stage.
He will now hope to continue his good form in Ligue 1, and will likely compete with Gregory van der Wiel for the starting spot at right-back.
"Playing for Paris Saint-Germain with exceptional players is a childhood dream," Aurier told the club's official website.
"I'll give my best to help the team reach the top.
"After a first participation in the World Cup, I witnessed a fantastic summer. I thank the directors of the club for their trust."
In his time at Toulouse, Aurier made 80 appearances in all competitions, scoring eight goals, and PSG president Nasser Al-Khelaifi believes the champions have signed a real prospect.
"Serge Aurier, one of the most promising young players in world football, courted by the biggest clubs, has chosen Paris Saint-Germain to continue to shine on the European stage," he said.
"We are delighted to welcome this young player into our team."
PSG have confirmed that the deal includes an option to purchase the defender outright at the end of his loan spell.
