Butland will provide cover and competition for number one David De Gea and Tom Heaton at Old Trafford after Martin Dubravka was recently recalled from his loan by parent club Newcastle.
The 29-year-old, who has been capped nine times by England, said: "This is an amazing club and one that I am now proud to represent.
"I'm really looking forward to working with an unbelievable goalkeeping group, supporting each other every day to create the best training and playing environment for the team.
"I've played against David de Gea and represented England alongside Tom Heaton; they are top-class keepers and I am relishing the opportunity to compete alongside and support them as team-mates.
"There is a lot that this group can achieve this season and I'm excited to play my part in helping everyone to reach these ambitions."
Confirmation of Butland's move comes a day after United boss Erik ten Hag emphasise the importance of having three experienced goalkeepers ahead of his side's FA Cup tie with Everton.
"We need a squad with three experienced goalkeepers," Ten Hag said. "What is (Butland) bringing? I'm really happy with David, it's quite clear he's our number one, but something can happen with David.
"You have to be prepared for that and not be in such a moment where you have only one experienced (goalkeeper), you can be unlucky. Last year I had this situation with Ajax.
"We had three goalies injured and you don't want to be in a situation that at the end of the season, hopefully when you can play for trophies, that you have to put in a young 'keeper.
"You can't expect it from the young goalkeeper but also it could kill your season and that is what you have to be prepared for."