Lyon said in a statement that Spurs had paid 60 million euros (54 million pounds) for the 22-year-old, with potential incentives amounting to an extra 10 million euros.
The fee eclipsed the London club's record of 42 million pounds paid for Colombia defender Davinson Sanchez in 2017, with Ndombele set to join their highest earners.
"We are delighted to announce the signing of Tanguy Ndombele from Olympique Lyonnais", said Tottenham, adding that he had signed until 2025.
Ndombele was a crucial player at the heart of midfield for Lyon last season, making 34 appearances in Ligue 1 and helping the club qualify for the Champions League with a third-place finish.
Spurs reached their first Champions League final this year, losing to Liverpool in Madrid. They finished the Premier League season in fourth place to again qualify for Europe's elite club competition.
The Frenchman was Spurs' second new recruit on a busy day, the club having earlier ended 18 months without a signing by announcing that young Leeds United winger Jack Clarke had put pen to paper.
Clarke, 18, has gone back to the Championship (second-tier) club on loan for the 2019-20 season.
Ndombele, who joined Lyon from Ligue 2 side Amiens in 2017 and has six caps, is Tottenham's first major signing since Brazil forward Lucas Moura joined from Paris St Germain in January 2018.
Spurs have had a vacancy in midfield since Belgian Mousa Dembele joined Chinese Super League side Guangzhou R&F in January.
Tottenham begin the new league season at home to promoted Aston Villa on Aug. 10.
(Reporting by Rohith Nair in Bengaluru; Editing by Hugh Lawson and Ken Ferris)
