The 25 year-old, who was close to signing for Norwich City in the pre-season, will leave for Australia on Wednesday and could make his debut for Ange Postecoglou's men at the weekend.
Postecoglou confirmed Troisi's capture and said the Adelaide-born player will be an important part of the team.
"Throughout his time in Europe, James has shown that he has the talent and attributes to compete at the highest levels of club football," he told The Advertiser.
"At just 25, James is in the prime of his career, so we are extremely excited about what he will bring to Melbourne Victory.
"He obviously has a desire to get back into the Socceroos set-up, and there's no better way to state his case than to have an impressive A-League season."