Montrose becomes manager Nigel Worthington's seventh summer signing and has signed a two-year deal.
The former Wigan trainee had been training with Southend, whose manager Phil Brown admitted this week that there was interest in Montrose from another club and the Minstermen have now beaten the Shrimpers to his signing.
Montrose began his career with Wigan and had loan spells with Rochdale, Cheltenham and Chesterfield before joining Wycombe in 2009.
After two years with the Chairboys, he signed for Gillingham and then played five times in a loan spell at Oxford at the end of last season as the Gills won the League Two title.
Montrose joins fellow new signings Sander Puri, Wes Fletcher, Chris Kettings, Ryan Bowman, Craig Clay and Ryan Jarvis at Bootham Crescent.