The 28-year-old midfielder joins the Barclays Premier League club for an undisclosed fee on an initial six-month deal, which could potentially see him stay until the summer of 2014.
Wandsworth-born Sidwell said: "I'm delighted my move to Fulham has been finalised, and I'm looking forward to training with the squad and helping the club make steady progress up the table in the second half of the season."
Sidwell, who had also interested Wolves before undergoing a medical with West Ham, joined Villa from Chelsea in 2008 after initially making an impact in the top flight with Reading.
He continued on Fulham's official website, www.fulhamfc.co.uk: "I'd also like to thank (chief executive) Jez Moxey, and (manager) Mick McCarthy in particular, at Wolves for being so understanding in my desire to return to London and to play for Fulham."
Fulham boss Mark Hughes added: "On the pitch he can get from box to box, he works tirelessly, is good on the ball and can also get you a goal. He wants to be part of what we are doing here - and because of that he will do well for us."
Source: PA
Source: PA