The defender, 28, has previously spoken about being a supporter of the Scottish giants.
Advertisement— Celtic Football Club (@CelticFC) September 2, 2020
"I'm delighted, it took a little while to get it done [the deal], I'm over the moon," he told FAI TV. "It's something I've always dreamed of doing [playing for Celtic]. To get the chance and for the club to want me is a special moment for me, I'm really excited to get up there and get going, hopefully I can bring success to the club."
The Derry native added: "People know the connection with Derry, Ireland and Celtic. It's all we knew growing up really. I was lucky enough to go to a few games and experience the atmosphere so it was my boyhood club, it's literally a dream to play for Celtic. I've had all of the jerseys over the years, now to have the experience to go and play in Celtic Park is a huge honour."
Duffy said he was looking forward to helping the club as it bids to claim a tenth Scottish title in a row.
"It's huge, obviously I don't need a reason to sign for Celtic, but if there's ever a reason it's this year to make history. To get the chance to be a part of that is a great honour but there's a lot of work to do to get that ten in a row."
Duffy's Brighton departure has looked inevitable for some time now as he had fallen down the pecking order with manager Graham Potter favouring a central defensive partnership of Adam Webster and Lewis Dunk.
Thanks to everyone at @OfficialBHAFC for most amazing years at the club good luck this season will miss use all 💙 pic.twitter.com/N3dAXy7VVB
Advertisement— Shane Duffy (@shaneduffy) September 2, 2020
Celtic boss Neil Lennon described Duffy as a "leader" and a "warrior".
"We are delighted to bring a player of Shane’s quality to Celtic. He is an international player with so many great attributes," Lennon.
Duffy… 𝗮𝗻𝗻𝗼𝘂𝗻𝗰𝗲𝗱 ✅🙌
📝 @FAIreland international defender, Shane Duffy has joined #CelticFC on a season-long loan! 🇮🇪
Welcome, @shaneduffy! 🤩💚— Celtic Football Club (@CelticFC) September 2, 2020
"He is leader and he’s a warrior – someone with real ability and who will also give us that great physical presence.
"I know too he is a player who will add great personality to the dressing room. This is a real coup for the club. From the off, Shane wanted to come to Celtic and we are delighted we have been able to fend off English Premier League interest."