The 29-year-old former Barnsley, Blackpool and QPR forward has agreed a two-year deal with the Millers and will become manager Steve Evans' first signing at the club.
"Daniel is a gifted young man who I tried to sign for my previous club a couple of times," former Crawley boss Evans said. "We tried to sign him last summer, then made another attempt in the January window, but it didn't happen.
"We have tried our level best in the last week. We showed him around the stadium and spoke to the kid again at the weekend. We're really excited to be working with him because he's a talented boy."
Nardiello, who started his career at Manchester United, scored 24 goals in 77 appearances for Exeter after joining from Blackpool in the summer of 2010.
The former Wales international is expected to be the first of several new arrivals at Rotherham, who are scheduled to kick off the 2012/13 season at their new 12,000-seat New York Stadium.