Siaka fell out of favour at the Parc des Princes last season, making just two appearances, and PSG agreed to let him move on.
He travelled to Montpellier on Tuesday to try and tie up a transfer but it took longer than expected and reports suggested the deal was in danger of collapsing.
However, everything has now been finalised and the arrival of the Ivory Coast international has been confirmed.
"An experienced player, who is used to Ligue 1 battles, Tiene has joined Montpellier squad for the next two seasons," read a statement on the club's official website.
Fulham and West Bromwich Albion had also been linked with Siaka, who spent three years at PSG.