The centre back has earned seven international caps for Paraguay and was named in the 2017 Campeonato Brasileiro Team of the Year, where he was also recognised as one of the best players in the division in his respective position.
Speaking about his move to the London Stadium, Balbuena said: “I’m really excited for this new challenge and my target is to meet the demands of the Premier League.
“Obviously to be at West Ham is an extra motivation, and I want to do my best to help the team.”
Equally as delighted with the move was West Ham's director of football Mario Husillos, who added: “We welcome Fabian to West Ham United. He is somebody we have monitored for a long time and we are very pleased to have taken the opportunity to sign him.
“He is a player of great strength, character and personality. To be captain of Corinthians, one of the biggest clubs in South America, requires a very strong mentality, and he also has international experience with Paraguay.
"He has won many individual honours and was often named one of the best central defenders in Brazil for his statistics.
"We believe he will improve our squad and our defensive qualities. He is the perfect age – a player for the present and the future – and he can be a very important player for many years at West Ham."