The Romania international has been released by Manchester City after three seasons and will join Sunderland from July 1 on a free transfer.
He arrived at City from Politechnica Timisoara in 2011, but was restricted to 29 appearances and is looking forward to a fresh start at the Stadium of Light.
“It is a great privilege and honour to join a club like Sunderland. They have an amazing history and tradition and of course passionate fans,” the 27-year-old told the club’s official website.
“When I left Manchester City, it was important that I chose a club with good ambition and a head coach who has the hunger and desire to take the team forward.
“After speaking with the boss, I knew this was the right place and he was the right man. I can't wait to start.”
Italian stopper Vito Mannone produced some impressive displays for Sunderland last season, but Sporting director Lee Congerton believes the arrival of Pantilimon will further strengthen the squad.
“Competition for places is healthy and brings out the best in players. We already have a great goalkeeper in Vito Manonne and another one now in Costel," said Congerton.
“Add to this youngster Jordan Pickford, who recently signed a long-term deal and we have a very strong stable of goalkeepers, which is vitally important in the top flight.”
Watch Sky Sports News from 9am this Wednesday for the announcement of next season's Premier League, Football League and SPFL fixtures.