The full-back has signed a one-year contract, with the Terriers having the option on extending it into the 2019/20 season.
Erik Durm has earned seven caps for his country and is well-known to Huddersfield head coach David Wagner, who signed him for Borussia Dortmund II in 2012.
Durm has struggled for game time at the Westfalenstadion in recent years due to injuries, making just 20 appearances over the last two seasons.
He has however recovered from his latest injury sustained in January when he ruptured ligaments in his ankle.
Wagner told the club’s official website: “It is not every day that you can bring a player of the quality of Erik to your Club. He is a World Cup winner and has played at the very highest level, so this is a fantastic day for Huddersfield Town.
“Obviously I know Erik well from our time together at Dortmund and he has all the qualities to be a great success in our ‘Terriers Identity’.
“He has been very unfortunate with injuries for a year now, but he was training with Dortmund at the end of the season and he’s passed our medical with flying colours this week. That’s no surprise to me; he was always one of the fittest players at Dortmund and has great physical attributes; real stamina and speed.”