Sarr joins Palace on a five-year contract having left Watford for Marseille a year ago.
Palace chairman Steve Parish said: “We have been admirers of Ismaïla for some time now and are delighted to be able to welcome him to the club.
"He is a player who has proven his ability both in English football and on the European and international stage, and I am confident he will be a valuable addition to Oliver’s squad.”
Manager Oliver Glasner said: "We're happy that Ismaïla has decided to join Crystal Palace because he knows the Premier League when he played at Watford, he knows living in England, and he also had many games with Marseille last season.
"In every year, in every club where he was, he's showed that he can score goals. He showed it as well in the national team for Senegal, so we are really pleased that he will join our group."
Sarr added: “I am very happy to be here because Crystal Palace is a great club. Thanks to the coach and the Sporting Director – they told me about their project, and I accepted because it is a good project.
"I am going to work hard on the pitch and off the pitch for the team and for the fans as well."