The move reunites Berbatov with manager Martin Jol, who was in charge when the 31-year-old was at Tottenham Hotspur.
"I'm delighted to have signed for Fulham and I look forward to playing under Martin Jol once again," Berbatov said on Fulham's official website after agreeing a two-year deal for an undisclosed fee.
"As soon as I was aware of Fulham's interest my decision to join was an easy one to make.
"I'm impressed with the set up here and the people have made me feel welcome. There is a close and personal feel around the club and I can't wait to get started."
Jol said Berbatov was a player he had always admired.
"He did well for me at Spurs and I'm sure that he will do well here at Fulham.
"He's a player of great quality and technical ability who will give me the attacking option I've been looking for.
"When he's not scoring goals, his ingenuity often leads [to] chances being created for his team mates and I'm delighted that we've been able to convince him to come to us, as there was a lot of attention from other clubs."
Berbatov had appeared bound for Fiorentina earlier in the week and left club officials fuming after his last-minute U-turn.
Fiorentina said in a statement that he had been booked on a flight to Italy, but he did not travel due to "the reckless and arrogant actions of other clubs". He was then linked with a move to Juventus before the deal with Fulham was completed.
Berbatov's move away from Old Trafford had been widely tipped, having fallen out of favour with manager Sir Alex Ferguson.
He joined United from Tottenham Hotspur in 2008 for a club-record fee of 30.75 million pounds, scoring 48 goals in 108 Premier League appearances.
Berbatov is the second player to move to the West London club on Friday, with former England international Kieran Richardson joining from Sunderland on a three-year deal, with the option of a fourth year.
