Krychowiak will finalise the transfer to The Hawthorns once he receives international clearance.
The 27-year-old arrives at the Premier League club from France, where he helped PSG win the Trophee des Champions, Coupe de France and Coupe de la Ligue last season.
“I had a lot of offers from Spain and Italy, but this is a very ambitious club. There’s a good atmosphere here,” the Poland international told West Brom’s official website.
Club chairman John Williams added: “This is a fantastic loan agreement for Albion and we are very pleased to have completed the transfer.
“Grzegorz arrives with an impressive reputation that is well-earned and a CV in European football which clearly displays his qualities. We are delighted to welcome him and are confident he will make a significant contribution to the first-team group this season.”
Krychowiak completed his move a matter of hours after the Baggies signed Kieran Gibbs from Arsenal on a four-year deal.