Wan-Bissaka agreed a seven-year contract with the Hammers after spending five years at Old Trafford. The 26-year-old right-back made 190 appearances for United following his 2019 move from Crystal Palace.
He appeared in United's surprise FA Cup final win against City last season, but was not in United manager Erik ten Hag's plans for the new season. "It's an amazing feeling to be back in London and I'm excited for what's coming," Wan-Bissaka said.
"I was born here and I know the ins and outs of London, so to be back playing in this city means a lot to me."
Wan-Bissaka is West Ham's eighth close-season signing after their swoops for Jean-Clair Todibo, Crysencio Summerville, Luis Guilherme, Niclas Fullkrug, Wes Foderingham, Max Kilman and Guido Rodriguez.
Hammers technical director Tim Steidten said Wan-Bissaka's Premier League experience would be valuable for the club's new boss Julen Lopetegui.