The 20-year-old completed his medical with the Old Trafford outfit on Thursday and will link up with the Red Devils from July 2010 on a four-year contract.
It completes a meteoric rise for the England Under-21 star, who only two years ago was playing non-league football with Maidstone.
It is likely to represent United's only significant business of the transfer window. But after beating off competition for a player who has still made fewer than a dozen appearances for the Cottagers, Sir Alex Ferguson feels it represents a smart bit of business.
"Chris is an extremely talented young defender, who we have been monitoring for some months," said Ferguson. "He is very quick and reads the game well. He will be a great asset to the club, playing alongside some of the best defenders around and we are delighted to have secured his signature."
The way the deal has been done will only fuel the belief that Nemanja Vidic will be leaving in the summer.
Ferguson is almost certain to refute such claims, although, with Johnny Evans already established as back-up to Vidic and Rio Ferdinand, something will have to give if Smalling is to make any meaningful contribution during his debut season.
That will not worry the Greenwich-born player though, who is eagerly looking forward to the challenge.
"Joining Manchester United is an unbelievable opportunity for me. My time at Fulham has been great and I have learned a lot about the game from Roy Hodgson and the coaching staff," said Smalling.
"But the chance of coming to the biggest club in the world is something I just couldn't turn down. I am excited about working with Sir Alex and the fantastic players in his squad."