The 19-year-old, who joins for a reported £19.3m, follows Fred as United's second signing of the window as Jose Mourinho attempts to push through the club's summer business ahead of this month's World Cup.
Highly rated across Europe, Dalot rose through the ranks of Porto's youth system before making his senior debut in Portugal's Primeira Liga last season.
Of his move to Old Trafford, the right-back said: “Joining Manchester United is an unbelievable opportunity for me. I have grown up in Porto's Academy and I am so thankful for everything they have done for me. But the chance of coming to the biggest club in the world is something I just couldn't turn down.
“I'm excited about working with Jose Mourinho and learning everything I can from such a successful coach. I am looking forward to playing alongside the fantastic players in the squad.
"I know that this is one of the best clubs in the world and it is unbelievable to be here and I hope to achieve great things."
Having pursued Dalot following the conclusion of the 2017/18 season, Mourinho expressed his delight at landing the youngster while describing him as the "best full-back in Europe" for his age group.
“Diogo is an extremely talented young defender with all the qualities to quickly become a great player for this club," the United boss said.
"He has all the attributes that a full-back needs: physicality, tactical intelligence and technical quality, combined with a Porto Academy mentality which prepares players for the maturity they need at the professional level.
“In his age group, he is the best full-back in Europe and we all believe he has a bright future ahead of him at Manchester United.”
Dalot has represented Portugal from U15 to U21 level and featured for Porto in their most recent Champions League campaign.
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