The 25-year-old had been linked with a move to White Hart Lane for some time and will now link up with Andre Villas-Boas' squad for the new Premier League season.
A number of Premier League clubs were believed to be interested in signing Capoue with Arsenal, Everton and Liverpool all linked with the player in recent weeks.
Atletico Madrid were also thought to have made a bid but Premier League newcomers Cardiff came closest to scuppering Tottenham's move, with Bluebirds manager Malky Mackay confirming he had a bid of around £9million accepted by Toulouse.
Mackay described discussions over personal terms with the player as 'delicate' and was unable to add the midfielder to his summer signings.
Capoue, who has seven full caps for France, made his Toulouse debut in 2007 and went on to become one of their most important players.
The midfielder, who can also be employed at centre-half, was also named in the Ligue 1 Team of the Year in 2012 alongside new Spurs team-mate Hugo Lloris.