Bolasie, who joined Palace from Bristol City in 2012, follows recent new recruits Ashley Williams, Idrissa Gueye, Maarten Stekelenburg and Shani Tarashaj to Everton.
"It was a no-brainer to come here but now I've come to Everton, the job is not done. I've got to work hard and feel my way in. I'm ready and up for the challenge," he said in a statement.
Bolasie has been capped 27 times by his country, scoring seven goals. He netted nine goals in 90 Premier League appearances for Palace.
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Everton's new manager Ronald Koeman said the player would add speed, strength and versatility to his attack.
"Yannick is a player who has been a long time on my radar because he's the type of winger I like, fast, strong and he can play different positions in the forward line," added the Dutchman.
"He's a good age and he has experience in the Premier League. He will give strength to the team and I'm very pleased to have Yannick as part of what we are trying to build here at Everton."
(Reporting by Simon Jennings in Bengaluru; Editing by Tony Jimenez)
