The 26-year-old joins after leaving Panathinaikos in Greece.
The midfielder has extensive experience of playing in Spain, having previously turned out for Granada, Las Palmas, Espanyol, Villareal and Elche.
Wakaso has played for the Black Stars since 2012 and played five matches at this year’s Africa Cup of Nations.
“Deportivo Alaves want to welcome Wakaso and wish him much luck in this new stage,” the club said in a statement.
Wakaso becomes the eighth player the Victorians have added to their set-up and the Ghanaian is looking forward to a great campaign in the upcoming season.
Wakaso has also played in Russia, with Rubin Kazan, and Scotland, with reigning champions Celtic.
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