The Ghana international scored 11 goals in 44 appearances last season and joins the Eagles as they look to improve upon their finish of 11th in England's top flight last term.
He told Palace's website:
“The manager, chairman and sporting director all made an effort for me to be here today, so I have to thank them. I am looking forward to playing with the boys and meet the fans, and hopefully it’ll be a good season.
“I chose to come to Palace to continue improving. It’s a step up for me and I’m ready for the challenge and to get to where I think I can get to.”
Ayew, brother of current Fenerbahce loanee Andre, is Palace's fourth signing this summer, after goalkeeper Vicente Guaita from Getafe, midfielder Cheikhou Kouyate from West Ham, and free agent Max Meyer, formerly of Schalke.