Bayern have paid €45m up front with a further €5m due in bonuses.
“This is one of the happiest days of my life”, Palhinha said. “I’m now playing for one of the top clubs in Europe. It’s a dream come true for me, and I’m very proud of that.
“I’m looking forward to the atmosphere and the fans at the Allianz Arena. I want to enjoy success with FC Bayern and win titles. I’ll give it my all.”
Meanwhile, Fulham chief Tony Khan said: “Joao Palhinha has been a fantastic player for Fulham since he joined us in July 2022.
“His formidable presence in the midfield, his aggressiveness and phenomenal skill have made him a fan favourite and a leader on the pitch for Fulham.
“All of us at the club are grateful for Joao’s hard work, the time we shared with him, and the great memories from these past few years working together.
“We’ve reached an agreement today that could result in the highest transfer negotiation in club history, with these resources coming in at an essential time in our summer squad planning for the season ahead and our long-term future. We wish Joao the very best in his new journey.”