"It's all done now," the Everton website quoted manager David Moyes as saying. "Landon will join us at the start of January.
"He will come in and add pace, he's a good finisher and is captain of the USA national team so he has that experience.
"He is the first of two or three players I want to bring in in January."
Everton said the 27-year-old striker, whose arrival is subject to a successful work permit application, would stay at Goodison Park until mid-March. The Galaxy's MLS season-opener is on March 27 at home against New England.
Donovan, a Los Angeles team mate of David Beckham and the most capped U.S. international, signed a four-year contract extension only this week that will tie him to the Galaxy until 2013.
"I'm fortunate. Most soccer players don't get this opportunity to have the best of both worlds. It's incredible," the player, named as the MLS most valuable player for 2009, said on Wednesday.
Donovan, who has previously played in Europe for Bayern Munich and Bayer Leverkusen, joins goalkeeper compatriot Tim Howard at Everton.
The striker, who has played 120 times for the United States and scored a record 42 goals, will be a key player in the U.S. team facing England at next year's World Cup finals in South Africa.
Beckham will also be playing in Europe after agreeing a similar loan deal with AC Milan.
