The striker, who Hammers manager Slaven Bilic gave a senior international debut to for Croatia in 2009, becomes the club's 10th summer signing and third on deadline day after loanees Alex Song and Victor Moses.
"I am very excited to be signing for West Ham United, especially as it is a big Club and I didn't know until a couple of days ago that I would have the opportunity to come here," he told the club's official website.
"Of course it is always a target to play in the Premier League, so when I found out that West Ham wanted me there was no doubt that I wanted to come here.
"I've played for Slaven before for the Croatia national team and he is a great manager and a great man. I am really happy and delighted to be working with him and all his staff again.
"I'll be joining a team that's on a high after the result on Saturday."
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