The versatile 25-year-old has been signed from Rotherham United for an initial fee in the region of £1.5m rising to a potential £2m with add-ons.
He has signed a four-year contract at the Baggies, who have more than doubled his salary, following an impressive season in the Championship for the Millers, scoring eight goals from defensive midfield despite being relegated.
“It’s a great opportunity for me,” said Ajayi. “I want to play at the highest level and I have joined a club with the ambition to get there.
“I want to play my part in helping the team get promoted because that is definitely the target.”
Ajayi follows Kenneth Zohore, Albion's new No.9 who cost a total of £8m, through the door.
He is the third signing of the summer after 23-year-old Filip Krovinovic joined on a season-long loan from Benfica.
Albion's recruitment team, technical director Luke Dowling and head of recruitment Ian Pearce, are making a concerted effort to sign players in the mid-20s age bracket this summer.
The Baggies believe they have a number of promising youngsters coming through the academy aged 18 to 21 and a number of experienced professionals aged 28 and over.
But they are keen to find players this summer just entering their prime with potential sell-on value.
Ajayi certainly fits that bill, having shot to prominence last season with the Millers.
The former Charlton and Arsenal academy player only had one year left on his Rotherham contract, allowing the Baggies to swoop.
Ajayi could return to the New York Stadium on Tuesday, when the Baggies visit Rotherham for a pre-season friendly.
But he is expected to be with the team in Scunthorpe today when Albion fans could catch their first glimpse of Zohore in blue and white stripes.