The 21-year-old made a strong impression after joining Sassuolo from Alanyaspor in January on loan with an obligation to buy.
Juventus said he had signed a five-year deal to run until June 30, 2024.
Demiral scored twice in 14 Serie A appearances in the second half of last season.
Juventus, boosted by the 2018 arrival of Cristiano Ronaldo, romped to their eighth successive Italian top-flight title last term.
Demiral will strengthen a defence including the ageing Leonardo Bonucci and Giorgio Chiellini, while Juve have also been linked with a move for Dutch teenage star Matthijs de Ligt of Ajax.