The shock move has stunned everyone connected with the Red Lichties — including Gayfield boss Paul Sheerin.
Swankie was an integral part of the Arbroath side that pushed Second Division champions Cowdenbeath all the way last season and had been offered a new deal to stay at the club.
However, the 28-year-old has opted instead to move to Station Park, citing the 100-mile round trip to training with Arbroath as the key factor in his decision.
He said: ''It all happened really quickly. I didn't receive a firm offer from Forfar until late on Tuesday night.
''I made up my mind quite quickly and phoned Peanut (Sheerin) to tell him. It was a really difficult call as he isn't just my manager, he is my mate.
''However, I now live and work in Montrose and with Arbroath training in Perth the travelling was taking its toll.
''I was missing sessions but obviously Forfar is a lot closer. It will be a big wrench leaving my home town club but I am looking forward to the new challenge.
''I hope the Arbroath fans will understand why I have made my decision and I wish the club all the best in the future.''
Swankie's capture was part of a double signing by Forfar boss Dick Campbell, who also snapped up former Brechin stalwart Charlie King.
The veteran manager could not conceal his joy at pulling off the transfer coup and promised more big news was imminent.
Campbell said: ''I am absolutely delighted to have signed Gavin and Charlie. I think it sends out a clear message to everybody that I wasn't prepared to accept what happened last season when we really struggled.
''Every year, I look to improve the club and we didn't. But what a signing Gavin is. He is one of the top three players in this division and it is great credit to him for agreeing to come here and for the board of directors at Forfar.
''To be honest, as an Arbroath lad I was surprised that he agreed to leave them, especially as he is good pals with Peanut. However, I am very happy he has pledged his future to Forfar.
''Charlie is another great addition to the squad. No-one knows him better than me. I signed him 10 years ago for Brechin and tried to get him again two seasons ago but he was getting a testimonial from Brechin.
''He had maybe got a wee bit stale at the Glebe and he is ready for a new challenge."
Sheerin admitted the loss of Swankie was a huge blow to his plans for next season, especially as he is set to lose another vital member of his squad Josh Falkingham to Dunfermline.
However, there was some good news for the Gayfield gaffer who has persuaded top scorer Steven Doris and keeper Darren Hill to commit to the Red Lichties.
He said: ''We made Gavin a great offer but it looks like Forfar have offered more. We wish him all the best for the future but it is a massive blow for us, especially as we look like losing Josh to Dunfermline.
''They have both been big players for us and I now have a major hole to fill for next season. Thankfully, I managed to get Steven Doris tied up before he went on holiday at the weekend.
''There was a bit of interest from other clubs, especially after he scored 21 goals last season, but he was keen to get things sorted as quickly as possible.
''So I am delighted he and Darren will be at Gayfield again next season.
''I have agreed a deal with another new player but that will not be finalised until early July. It is still slow going trying to bring others in but after losing Gavin, I will just have to knuckle down and redouble my efforts.''