The France internationalist has signed a 3½-year contract at Parc des Princes.
Neither club have revealed the final price tag for Cabaye - with Newcastle announcing the sale for "an undisclosed fee" on their website - but reports in France yesterday suggested PSG have paid in the region of £20m.
"I was won over by the project at Paris St-Germain," Cabaye said. "I can't wait to join this exceptional squad and help the team reach its objectives in France and in Europe."
Newcastle have tabled a bid for Lyon midfielder Clement Grenier as a possible replacement, and have also signed Luuk de Jong, the Borussia Monchengladbach striker, on loan for the rest of the season.
The 23-year-old, who will wear the No.18 shirt, said: "Newcastle is a great club and I have a good feeling about it. I have been made to feel very welcome by everyone."