The 28-year-old Scotland international has put pen to paper at Portman Road after agreeing personal terms and passing a medical.
Berra, who was available on a free transfer after leaving Wolves earlier this summer, had been linked with a host of clubs, but Town boss Mick McCarthy was able to clinch the deal.
McCarthy is a big admirer of Berra having signed and worked with him during his time in charge at Wolves and sees him as a key addition to his plans for the new season.
McCarthy told the East Anglian Daily Times: "He's signed a two-year deal. I'm delighted, it's a fantastic signing, he helped us get promoted at Wolves and keep us in the Premier League for two seasons.
"I'm surprised he hasn't got a club sooner and delighted we've got him. It's terrific for us."
Former Sunderland centre-back Titus Bramble has been on trial with Ipswich, where he started his career, and the 31-year-old came on as a second-half substitute in the 1-0 friendly win at Barnet on Saturday.
However, McCarthy has now ended his interest in signing Bramble following the arrival of Berra and he has also ruled out a loan deal with Tottenham for Bongani Khumalo.