The Italian club were relegated from Serie A at the end of last season after finishing 18th and will play in Serie B for the first time in nine years next season under the management of Gennaro Gattuso who played alongside Lafferty during last season for Sion.
A deal looked to be on the cards nine days ago with Palermo president Maurizio Zamparini confirming their interest. He said then of Lafferty:
"He is someone who can lead the attack by himself, similar to Luca Toni. In Switzerland he hasn't scored many goals, so we hope he can get them here."
The deal finally went through today after Lafferty completed his medical and the Northern Ireland international then revealed that he was close to a move there in the last transfer window, this while Gattuso was still at Sion.
Lafferty confirmed: "I'm delighted to be here. Palermo tried to sign me in January but unfortunately we couldn't close the deal. Now I can't wait to get started.
"When I was younger I watched a lot of Italian football and I know there's a very passionate fanbase here at Palermo."
Palermo will be his fourth club. Having started his career with Burnley he scored ten goals in 89 appearances and made sixteen full international appearances for Northern Ireland before moving to Rangers in the summer of 2008.
He played in the SPL for four years before signing for Sion last summer for whom he scored eight goals in 2012/13 before making this move to Italy just four days less than a year since his move to Switzerland.
Source: Clarets Mad