"I'm really happy to be here - it's a dream come true," Haksabanovic said in a statement.
"West Ham is a big club and it is a nice feeling to have signed. The move happened quite fast - we heard that they wanted me, so I was interested to hear the plan for me and when I did I was very pleased."
Haksabanovic represented Sweden at youth level before switching his allegiance to Montenegro and made the debut for the national side in June. He came on as a substitute in Montenegro's 4-1 World Cup qualifying victory over Armenia.
He became West Ham's fifth major signing of the close-season after goalkeeper Joe Hart, defender Pablo Zabaleta and forwards Marko Arnautovic and Javier Hernandez.
Slaven Bilic's side kick off their Premier League campaign with a trip to Manchester United on Sunday.
(Reporting by Hardik Vyas in Bengaluru; editing by Amlan Chakraborty)
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