The 30-year-old has completed his move to Upton Park after agreeing personal terms and passing a medical.
West Ham have signed Ljungberg in a deal that could rise to £3million.
The move ends a nine-year spell at Arsenal for Ljungberg who joined the club from Halmstads in 1998.
The Swedish international struggled with injuries last season and Arsenal have decided to let him move on as he could not be guaranteed a regular spot in Arsene Wenger's side.
Ljungberg becomes West Ham's fifth new signing of the summer and he will help bolster Alan Curbishley's midfield options following the injury to Julien Faubert and the departure of Yossi Benayoun to Liverpool.
Ljungberg is relishing the challenge of playing for West Ham and he revealed the ambition of chairman Eggert Magnusson played a big part in his decision to move to Upton Park.
"I'm coming here because I want to build a great team," said Ljungberg. "And why I want to join is because of Magnusson. He wants to bring them forward to be top of the country.
"He's willing to go to the transfer market to buy top players and mix them with youth players. West Ham have a great academy.
"He wants to help take the club up and take them to the top in England. It's a big challenge for me."
Hammers boss Alan Curbishley was delighted to land Ljungberg and believes he will prove a valuable addition to his squad.
"We spoke to Freddie over the last week and we tried to sell him the club and what we're about," Curbishley said.
"He's seen players come in and push us forward.
"He brings a few things, Champions League experience, captain of Sweden, he's versatile.
"There's a hunger there. He wants to come and push West Ham on and be partly responsible for that.
"He's joining another terrific club and that's the way he's got to see it.
"He understands the passion of the club and the passion of the fans and I'm sure he'll be a big hit here."
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