The younger brother of the Chelsea star had been speculatively linked with a move to Stamford Bridge or Liverpool but has chosen to remain in Germany upon his departure from Borussia Monchengladbach.
He has penned a five-year deal with BVB.
The 26-year-old Belgium international scored 13 goals and provided assists for 12 more in 35 matches for Gladbach last season.
Hazard told the Borussia Dortmund website: “I am grateful for five great years at Borussia Monchengladbach and very nice memories.