Last season Ugarte, 23, won the league and cup double with Paris Saint-Germain before playing every game at Copa América and being named in the team of the tournament, taking his tally of international caps to 22.
Since the start of the 2022/23 season Ugarte has averaged the second highest number of tackles per 90 minutes in Europe’s major leagues.
Manuel Ugarte said: “It is an incredible feeling to join a club of this magnitude; one that is admired all around the world. The project that the football leadership discussed with me is extremely exciting; Manchester United is an ambitious club and I am an ambitious player.