Ballack will be in Blue
"I'm happy and very proud," coach Jose Mourinho said.
"I'm really happy with the conversation I had with him and that's the reason he decided to come here."
As we know, Ballack was jeered by some Bayern fans in his final appearance for the club against Borussia Dortmund.
"I want a new challenge now. I've got to accept some jeering. It shows I was a very good player but it does hurt," he said.
Bayern supporters believed Ballack had deceived them about his future.
"I wasn't trying to mess anyone about," Ballack said.
"I was not able to make up my mind sooner and couldn't force a decision only because Bayern managers demanded one."
Ballack will lead Germany in this summer's World Cup finals on home soil.