The 20-year-old under-20 international is the club's first signing of the off-season.
He joins from Moroccan First Division side Fath Union Sport on a four-year deal.
The Tigers ended in 21st place in the Championship last season but have since appointed Bosnian Sergej Jakirovic as their new head coach.
He takes over from Ruben Selles, who was dismissed despite only being appointed in December 2024 and having kept Hull in the Championship after Tim Walter left the club in 22nd position.
The club welcomed the player with a post on their website: "Hull City are delighted to announce the signing of Moroccan midfielder Reda Laalaoui from Fath Union Sport for an undisclosed fee.
"A tall, athletic box-to-box midfielder who can also operate further forward, the 20-year-old has penned a four-year deal, with the club holding the option of an extra year.
"Internationally, the 20-year-old has earned 24 caps for Morocco Under-20s, scoring six times. His most recent goal came in the 2025 Africa Under-20 Cup of Nations, scoring the winner against Kenya before finishing runners-up to South Africa in the prestigious youth tournament that was held in Egypt."
Laalaoui added: "I am really happy to join Hull City. It is a historic club in England and I am looking forward to helping the team and making the supporters happy.
"It's a well-known team in England and one of my dreams was to play in England. As you know, it's one of the best leagues in the world and I am here to improve myself and it's important for my development.
"I always work hard for the team and I play with a lot of grit. I always play to win and I am here to win.
"I am looking forward to seeing the fans at the MKM Stadium and I will do my best to make them happy."
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