The Black Cats have spent much of the summer chasing the teenager's signature and he joins the 10 new arrivals in a busy summer at the Stadium of Light.
Mavrias, who has been capped twice by Greece, made his Panathinaikos debut in the Champions League as a 16-year-old in 2010, becoming the second-youngest player to play in the competition.
Sunderland boss Paolo Di Canio had been coy about revealing too much ahead of securing the 19-year-old's signature.
He told the Sunderland Echo: "Until a player signs, I would prefer not to say too much about them.
"But what do I know about Mavrias? I know him, I know that he is a very good prospect, I know that he's a very exciting player.
"But I don't want to talk about him, or any more about what was said about (Stephane) Sessegnon at the weekend because things you say about transfers can easily cause problems and confusion, so I would prefer to wait and see."
Despite his youth, Mavrias made 70 domestic and European appearances for Panathinaikos, scoring six goals.
Aside from his two full international appearances, he has also been capped at Under-17, Under-19 and Under-21 level.
Mavrias has been assigned the number 35 shirt by the Black Cats.