Hiljemark has signed a four-and-a-half year contract with PSV and has cost the Dutch club a fee in the region of €2.2million (£1.8m).
The Sweden Under 21 international had also been a target for the likes of Anderlecht and Nice, and is looking forward to making his mark with PSV.
"I feel great here," the 20-year-old told his new club's official website. "PSV have a big reputation in the whole of Europe.
"This choice feels very good. I am looking forward to playing here for PSV.
"And, of course, to become a champion, just like with Elfsborg - two titles in one season, that would be fantastic."
Reports have suggested that Hiljemark has been earmarked as a long-term replacement for Kevin Strootman, who is expected to be the subject of plenty of interest at the end of the season.