Forster has spent the last two seasons on loan at Celtic Park from Newcastle but the end of his long-running saga over his permanent transfer confirms the club's first summer signing.
Manger Neil Lennon told the club's official website: "We are delighted that Fraser has committed his future to the club and we believe he will be a magnificent addition to the squad.
"He gives us that continuity so this is something we are really pleased about. He is a top-class keeper."
Forster, 24, added: "This is a massive club and I feel like this is a step forward in my career.
"I want to win things as a team and improve as an individual and I think I will be able to do that at Celtic.
"It also gives me a great opportunity to play in the Champions League if we get through the qualifiers. I really enjoyed my time in Europe last season so I will be looking forward to it if it happens again.
"I enjoyed last season as a whole and we have a great young squad here.
"The players and the coaches make it an enjoyable place to be and I like being a part of this team."
Source: AFP
Source: AFP