West Brom have handed Giles Barnes an 18-month contract, with an option for a further one-year extension.
The 21-year-old playmaker moves to The Hawthorns as a free agent, having been released by Derby County in December.
He had been training with the Baggies throughout January and has convinced Roberto Di Matteo that he is worthy of a permanent stay.
Barnes is still working his way back to full fitness after suffering an Achilles injury in August, but Di Matteo is confident his decision to take a gamble on the youngster will pay off.
"Giles has had his injury problems over the past couple of seasons but he has undoubted ability," the Italian tactician told the club's official website.
"He is making good progress in his recovery from his Achilles problem and we're giving him all the support he needs.
"We've seen enough encouraging signs to offer him this deal, which has been structured to suit all parties.
"There is no question that if Giles can get his career back on track, we will have a very talented player on our hands."