The 28-year-old Australian international had fallen out of favour at Brighton, losing his spot to Robert Sanchez after a 3-0 loss to Leicester in December.
"Signing for the club you grew up supporting as a kid," wrote Ryan on Twitter. "Buzzing to be beginning this new chapter and will give everything I've got to contribute to the first club I ever loved."
"Mat has very good Premier League experience and has played over 100 times in the league, which is something that will benefit us greatly on and off the pitch."
The Australian will wear the number 33 at Arsenal and will compete with Bernd Leno and Alex Runarsson for the starting spot, after Matt Macey moved to Hibernian on a loan deal earlier this month.
Ryan joined Brighton in a then-club-record £5.4m deal from Valencia in 2017, and has gone on to make 121 Premier League appearances for the club, keeping 28 clean sheets.
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