The 19-year-old midfielder joins Palace on a £22.5million deal that runs until the summer of 2029.
While an agreement had been reached days ago, the deal came close to collapsing on Wednesday night, before issues were resolved on Deadline Day.
Blackburn manager Jon Dahl Tomasson said last week he wanted Wharton loaned back for the rest of the season, but Palace need midfield reinforcements due to Cheick Doucoure’s season-ending injury and insisted on Wharton joining now.
Wharton travelled to London on Tuesday for the first part of his medical, which was then completed on Wednesday.
“I’ve always wanted to play in the Premier League and to play for such a big club like Crystal Palace is a great honour," Wharton said.
“The way they’ve brought players from the Championship and developed them into world-class players in the Premier League is something that stood out to me, and it’s a big reason why I wanted to come here.”
Palace’s first bid of £18.5m was rejected last week. A fee of £22.5m including add-ons was soon reached, after they stepped up their interest when Manchester City midfielder Kalvin Phillips rejected the Eagles to instead join West Ham on loan.
Palace chairman Steve Parish said: “I’m delighted that Adam, a player whose rapid development we have followed closely, has decided to join us at Crystal Palace.
“Adam’s consistently impressive performances for Blackburn at such a young age have understandably caught the eye of many a club, but we believe Palace to be — as has so often been the case in recent years — the perfect place to harness his undoubted potential, and we look forward to working with him in the years ahead to do so.”
Wharton had been with Blackburn since the age of six, and only last month signed a contract extension until 2028.
He is Palace’s second signing of the month, following the arrival of 27-year-old right-back Daniel Munoz from Genk for a fee of £8.5m.