The 22-year-old has signed a three-year deal at the Stadium of Light with the option of an additional 12 months and leaves Arsenal after a 15-year spell in North London.
Ballard made 30 Championship appearances for Millwall in the 2021-22 season, scoring once, and he was widely expected to join Burnley in the current transfer window.
However, a move to Turf Moor fell through after personal terms could not be agreed, and Sunderland are believed to have forked out £2m to sign Ballard from Arsenal.
"It feels amazing to be here and I'm extremely happy. The fan base and size of this football club speaks for itself and having been up here to have a look around, it feels like an exciting place to be," Ballard told safc.com.
"Supporters can expect to see a player who loves defending and tackling – I'm more of a traditional centre half and I want to add those qualities to the team, whilst also bringing something a little extra. I'm now looking to take the next step forward in my career and I believe this is the perfect place to do it."
Ballard - a 10-cap Northern Ireland international - joined Arsenal's youth academy in the summer of 2007 but leaves without having made a single senior appearance for the Gunners. body check tags ::