The 20-year-old had been strongly linked with a temporary move to Everton in the closing weeks of the window, only for the Merseyside club to pull out at the eleventh hour, according to Yahoo Sports.
Dundee also saw off competition from Wigan Athletic, Bolton Wanderers, Huddersfield Town and Stockport County, along with interest from clubs in the Netherlands and Poland, to complete the deadline-day deal.
Moorhouse will spend the 2026/27 season in the Scottish Premiership after Dundee confirmed the signing on their official website, hailing it as their eleventh piece of summer business.
The versatile wide attacker or attacking midfielder has been on Manchester United's books since he was eight years old and was drafted into first-team training in January 2025 under then-manager Ruben Amorim, having impressed with his performances for the Under-21s.
He spent the first half of last season on loan at Leyton Orient, making 24 appearances in League One before returning to Old Trafford on deadline day in February. Manchester United have since overhauled their midfield options under Michael Carrick, bringing in Andrey Santos, Youri Tielemans and Carlos Baleba, which has opened the door for academy graduates such as Moorhouse to head out for regular first-team football elsewhere.
A Republic of Ireland youth international, Moorhouse won his first U21 cap in a defeat to Scotland in March 2025. He will link up at Dens Park with two former United academy products already at the club, Ethan Hamilton and Kieran O'Hara.
"I'm happy to be here, it's a good club," Moorhouse said.
"The facilities are nice here and it's been a good start so far this season, so I'm delighted.
"I just want to play as much football as I can, and I know I'll enjoy it. I just want to take in the experience of being in Scotland."
His path to this point has not been straightforward. Moorhouse was already involved in Under-18 football at 15 before a serious injury wiped out more than a year of his development, forcing him to work his way back through United's youth ranks before earning recognition at Under-21 level and a first-team training-ground promotion.
He is the latest young United player to head to Scotland for experience, following academy graduates who have had loan spells at Falkirk, St Mirren and Hibernian in recent seasons.