The 22-year-old defender has joined for an undisclosed fee with media reports suggesting it could rise to £5 million depending on conditions.
Reid, who played all three of New Zealand's World Cup games, scoring against Slovakia, has signed a three-year contract.
"I am looking forward to getting started. My dream has been to come and play in the Premier League and I am happy that I am a West Ham player," he told the club's website.
"It has been a mad couple of weeks and the last couple of days have been pretty hectic, so I am just happy to be here now. I am pretty decent fitness-wise. I had a game last Sunday so I am in pretty good nick.
"The World Cup was a life-changing experience and something I will remember forever. I want to bring the positives from that here on the pitch at West Ham.
"This club has great history and the league is one of the best in the world. I am looking forward to the challenge ahead."
Reid becomes the Hammers' fifth new recruit of the summer after Thomas Hitzlsperger, Pablo Barrera, Frederic Piquionne and Tal Ben Haim, with new manager Avram Grant hoping to avoid another season battling against relegation.