The Republic of Ireland international spent last season on loan at Brighton and Hove Albion from Wolves and started each of the south-coast club's 46 Championship fixtures.
Brighton looked set to sign the defender on a permanent deal after Wolves boss Kenny Jackett confirmed the two teams had agreed a fee.
However, it was Burnley who announced Ward's arrival on Friday, with the 28-year-old a seventh close-season signing for manager Sean Dyche ahead of Monday's Premier League opener against Chelsea.
Ward, who enjoyed three seasons of top-flight football with Wolves, told Burnley's official website: "I'm absolutely thrilled, I've had eight years at Wolves now and I was on loan at Brighton last year but to start a new chapter in my career is great.
"I don't think I could have picked a better place than Turf Moor and obviously to come to the Premier League is a massive pull as well.
"Once you get a taste of it you want to play as much Premier League football as you can.
"Burnley have done superbly well to get promoted and hopefully I can play some part in us having a successful year."
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