“It is an incredible feeling to join a club of this magnitude; one that is admired all around the world,” said Ugarte.
“Manchester United is an ambitious club and I am an ambitious player. I know how incredible United fans are and I cannot wait to experience Old Trafford.
“I’m someone who is so determined to succeed; I will sacrifice and give everything for my team-mates. Together we will fight to win trophies and reach the level where this club needs to be.”
United sporting director Dan Ashworth said: “Signing Manuel was another of our primary targets for this summer.
“He is among the very best ball-winning midfield players in the world and has an excellent record at both club and international level. His qualities, experience and passion will be a great complement to our strong group of midfielders.”
Ugarte’s move to United was confirmed hours after Scotland international Scott McTominay left the Old Trafford club to sign for Napoli.
United have received a £25.7m fee and have a 10% sell-on clause for the 27-year-old academy graduate, who made 255 appearances in all competitions, scoring 29 times.
Earlier in the day, United confirmed the arrival of 18-year-old Mali youth midfielder Sekou Kone from Guidars for a fee understood to be in the region of £1m.
United have spent nearly £600m on new players since Erik ten Hag became manager in 2022. Ugarte joins Joshua Zirkzee, Leny Yoro, Matthijs de Ligt and Noussair Mazraoui as summer signings.
The sale of McTominay means the club have recouped more than £85m this summer.
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