The 20-year-old Frenchman, who made his Formula One racing debut with Manor mid-way through 2016, will therefore line up alongside Sergio Perez next year.
Team principal Vijay Mallya tipped Ocon to blossom at Force India, where he replaces the Renault-bound Nico Hulkenberg.
"It's a pleasure to welcome Esteban as our new race driver," Mallya said. "He's an exceptional talent, as his status as a Mercedes Junior demonstrates, and I have no doubt he will flourish inside our team.
"We've had our eye on Esteban for a number of years and have followed his progress through the junior categories where he delivered outstanding results. We ran him in the car last year during testing and his performance convinced us that he is more than capable of racing alongside Sergio.
"Sahara Force India has a tradition of investing in young, talented drivers and the arrival of Esteban will bring some fresh energy and motivation to everyone in the team."
Ocon, who will have contested nine Grands Prix before formally arriving at his new team, added: "I'm very excited to join Sahara Force India. I know the team quite well already because I was a test driver last year and I'm really looking forward to working with everybody at Silverstone once again.
"I'm still relatively new to Formula One, but spending half a season at Manor Racing has given me some valuable experience and I feel ready for this new opportunity with Sahara Force India.
"The next few months will be very busy as I do all I can to prepare for the challenge ahead of me. It means lots of days at the factory, working on the simulator and building relationships with the engineers and everybody in the team.
"It's something I've been working towards my whole life and I intend to grab this opportunity with both hands so that I can deliver the results the team expects from me. I want to say ‘thank you' to everybody at Manor and especially to Mercedes-Benz for their support and belief in me. I can't wait for 2017 and my first full season racing in Formula One."
Toto Wolff, head of Mercedes-Benz Motorsport - which continues to support Ocon's career - believes Ocon will become one of the sport's leading drivers in the years to come.
"Esteban has the most impressive track record in junior formulae and he is an exceptional personality outside of the car," Wolff said.
"Force India have a strong record of working with young drivers and have again shown courage and vision to take Esteban under their wing. Even more, it is a positive development for Formula One that talent wins over money and we will be seeing some of the most impressive youngsters fighting to make it to the top in Formula One over the coming years."
Ocon's switch from Manor to Force India leaves just five seats open for 2017: two at Manor, two at Sauber, and one at Haas - which Kevin Magnussen is widely expected to fill.