The 24-year-old played under current Fulham boss Martin Jol when the pair were at Tottenham, with the Dutchman confirming on Monday evening that a move for the Morocco international was close.
Taarabt, who was relegated with Rangers last season, had expressed a desire not to play in the Championship and has now sealed an immediate return to the top flight with QPR's near neighbours.
Taarabt told the official club website: “This was a difficult decision for me, but at this stage of my career I feel I need to be playing at the top level.
“I hope the fans understand my decision and I really hope to return to Loftus Road one day.
“I wish QPR well for the season and hope they achieve promotion back to where I believe the club belongs.”
Jol was responsible for bringing Taarabt to England with Tottenham after signing him from Lens in 2007.
"I like his creativity and, of course, sometimes it comes off when he scores a lot of goals and I think he was involved in 40 goals [during the 2010-11 Championship promotion season],” said Jol.
"It is like Dimitar Berbatov - sometimes these fantastic talents will be blamed but I hope to find a way to gel him in together with the boys we've got.
"I think he can do a hell of a job for us because he is a tremendous player on the ball."
The Moroccan spearheaded QPR’s return to the top flight in 2010-11 with 19 goals but struggled to find the net over the next two seasons in the Premier League.
"Remember the fact he was an over £10 million player 12 months ago, so I think you have to take them when they are bad and hopefully he will show his potential here,” Jol said.
Taarabt becomes Jol's sixth signing of the summer following permanent moves for defenders Sascha Riether and Fernando Amorebieta, goalkeeper Maarten Stekelenburg, midfielder Derek Boateng and young forward Ange-Freddy Plumain.