The Republic of Ireland international, who joined Derby from Doncaster in 2008, will join new boys Adam Drury and Jason Pearce when he formally joins up with the club on July 1.
The 29-year-old midfielder came on as a substitute in the Euro 2012 game against Spain last week and made over 140 appearances for Derby following a four-year spell at Pride Park.
Warnock said: "Paul is another player I've been after for a long time, but obviously he was called up by Ireland for the European Championships so we've had to be a bit patient.
"I've seen him grow from his days at Doncaster and I'm delighted to have him here.
"I've always thought that he is a player who can create goals as well as score them, and he has just the type of attitude we need at Elland Road."
Source: FOOTYMAD
