The 18-year-old will join the club on July 1 after agreeing a five-year deal when his Derby County contract expires.
Before joining Derby – who went into administration at the start of last season and relegated it – in 2021, Ebiowei had childhood years at Arsenal and Rangers.
He told Palace’s official website: “I want to thank everyone at Derby County for their incredible support over the past year or so, and for giving me the opportunity to show what I can do on the pitch, and I would would also like to thank the fans for their encouragement, especially given the circumstances of last season.
“As everyone knows, the situation at Derby is very uncertain, so it was important for me to secure my long-term future.
“I am incredibly excited about the prospect of joining Palace as they have an incredible roster and huge potential. I sincerely hope I can make a positive contribution to the team this season.”
Palace chairman Steve Parish said of Ebiowei, who has represented England and the Netherlands at youth level: “I am delighted that Malcolm has chosen Crystal Palace as the best place to continue his development, following his impressive breakthrough in senior football in recent months. .
“He is a highly coveted young player and we very much expect to be able to provide him with a platform to thrive at the highest level.”
Additional reporting from PA