The 22-year-old centre-back, who has penned a three-year deal at Upton Park, becomes new manager Avram Grant's fifth close-season signing.
"My dream has been to come and play in the Premier League and I am happy that I am a West Ham player," Reid told the club's website.
"It has been a mad couple of weeks and the last couple of days have been pretty hectic. I'm pretty decent fitness-wise. I had a game last Sunday so I am in pretty good nick."
Reid, who has spent five seasons with Midtjylland, scored the last-gasp equaliser in New Zealand's 1-1 World Cup draw with Slovakia in the group stages in South Africa.
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