The 24-year-old Scot signs for an initial fee of £3m on a four-year deal, with the option of a fifth which would extend his stay until 2020.
Cairney was a star performer as Blackburn finished ninth in the Championship, making 45 appearances and scoring three goals.
He said: “I am delighted. For most of my life Fulham have been a Premier League club. They’ve had some great players over the years and it’s a very attractive club to come to.
“Now I’m just looking forward to getting started and meeting the boys. The hard work starts now. I can’t wait to get back here, get settled and get in amongst it.
“Every player wants to play in the Premier League and if I can do that with Fulham that would be fantastic.”
Nottingham-born Cairney began his career as a Leeds trainee before joining Hull City. He moved to Blackburn in 2013.