Thorne spent the end of last season on loan at Pride Park and has been a target for Derby throughout the close-season.
Having had an initial bid for the 21-year-old rejected last month and the player himself handing in two transfer requests, the two clubs have now finalised a deal and Thorne has put pen to paper on a four-year deal.
"George has made two transfer requests since returning for pre-season training and has decided his future lies away from the club," Albion technical director Terry Burton told the club's official website.
"Derby have now met our valuation for the player and given the circumstances we have agreed to the transfer."
Thorne started the Championship play-off final defeat at the hands of QPR last May and made 12 outings in total for Derby last term. He made 17 appearances for Albion.
Of the signing, Derby head coach Steve McClaren told his club's official website: "It's taken a lot of hard work for us to get to this stage but I think it says a lot about where we are at as a club that we've been able to bring someone like George in permanently."