The 18-year-old has moved to Parc des Princes on a season-long loan, but the Ligue 1 club have an option to buy on a four-year deal when the season comes to an end.
The teenager will now join an attacking lineup alongside Brazilian star Neymar, who became the world’s most expensive footballer earlier this summer when he signed for PSG from Barcelona in a deal costing close to £200m.
It has been widely suggested that the Ligue 1 giants have pushed for an initial loan in order to structure a deal that stays within Financial Fair Play regulations.
According to ESPN, the permanent transfer is expected to cost PSG €180m (£165.9m) plus add-ons, which would mean that the club have spent more than £350m in two years on just two players.
Mbappe was also linked to Manchester City and Real Madrid.