Manchester United have agreed to sell Angel Di Maria to Paris St Germain for 63million euros.
The 24-year-old has signed a four-year contract and will cost Stoke a fee of 3.6million euros (£3million), the Barclays Premier League outfit announced on their official website.
Pieters becomes Stoke manager Mark Hughes' first new signing since he succeeded Tony Pulis in May.
Hughes was thrilled to have captured the left-back, who has won 17 caps for Holland, saying: "I am delighted to have secured Erik's signature. The main focus this summer in attempting to strengthen the squad is ensuring it is balanced in key positions.
"While Erik is predominantly a left-back, he has also played for his country as a central defender, so he gives us other options.
"We need good quality in our starting eleven and good quality back-up for all areas, which Erik will certainly give us defensively."
Pieters started his career at FC Utrecht before moving to PSV in a 2.5million euro transfer in 2008.
In his five years at the Philips Stadium, Pieters has helped PSV claim three top-three finishes in the Eredivisie and a runners-up spot last season. PSV also won the KNVB Beker (Dutch Cup) in 2012 and have been regular participants in Europe.
Stoke's chief executive Tony Scholes said: "Erik has a considerable amount of experience of playing at the highest level, both on the international stage with Holland and in the Champions League with PSV Eindhoven.
"He is a player who was identified by our technical director Mark Cartwright as one who could strengthen our defensive options and we have been tracking his progress, so we are delighted to have brought him here now."
Pieters revealed he has long harboured hopes of playing in the Premier League and is thrilled to have finally been given the chance.
He said on www.stokecityfc.com. "I've always wanted to play in the Premier League.
"It's one of the hardest competitions to play in with some great players and teams and I'm really excited about it.
"I'm really looking forward to playing for this club. It's important for me that the first impression is good and I've got a great feeling about Stoke City."
On what he can offer the team, Pieters added: "My first job is to defend but I always want to attack and contribute as much as I can for the team. I've played a couple of times in the centre of defence as well but left back is my position.
"I've had a few injuries but that's all in the past now; I feel really good and can't wait for my time as a Stoke City player to start."