The 32-year-old, who arrived on the Costa del Sol on Tuesday, has passed his medical and trained with his new team mates for the first time.
He is eligible to play for Malaga in the Champions League, but the club do not have an option to make the move permanent at the end of the season.
The centre-back played for Brazil's Sao Paulo and Turkey's Fenerbahce before moving to Paris in 2011 but after featuring in 12 Ligue 1 games last season he has yet make a single appearance this term.
"The recent months have been tough for me in sporting terms because I have not been playing," Lugano told a news conference.
"I have a new challenge now for the second half of the season, and this will also help me to give my all for the national team, which is a top priority for me.
"I am in good shape, I just lack match minutes. I recognise I am joining a team that is doing very well, that is already strong in defence, but I have come to do my bit, to get some playing time and I think it is the best move for me."
PSG coach Carlo Ancelotti said in a statement: "Lugano went to Malaga, where he will certainly play more. I want to say that he was very professional. His behaviour was exemplary."
Lugano became Malaga's second mid-season recruit after the fifth-placed club in La Liga landed Chelsea's promising Brazilian midfielder Lucas Piazon on another six-month loan deal last week.
Malaga, who take on Porto in the last 16 of the Champions League next month, will meet Barcelona in a King's Cup quarter-final second leg on Thursday.
Manuel Pellegrini's side hold the upper hand against the league leaders after a 2-2 draw in last week's first leg at the Nou Camp.