The 27-year-old Netherlands international has signed a deal running until next June, with an option to extend it through the 2027-28 season. Malacia made 50 appearances during an injury-hit spell at Manchester United, having joined the 20-time English champions from Feyenoord in 2022.
Cincinnati general manager Chris Albright welcomed the signing as an addition of proven experience to the squad.
"We are excited to add a player of Tyrell's experience," Albright said. "He's played at the highest levels of the game and understands the demands of competing in those environments.
"His quality on the ball, defensive instincts, and team-first mentality is a welcome addition to the group and we're happy to have him in Cincinnati."
The move confirms a switch that had been in the works for several weeks, with Malacia having spent time training with the club's first team on trial before an agreement was finalised. His time at United was repeatedly disrupted by a serious knee injury that sidelined him for 17 months and required two separate surgeries, limiting him to just 11 appearances across his final three seasons at the club.
A brief loan spell at PSV Eindhoven last year yielded 12 appearances as he sought regular football away from Old Trafford. A fresh start in MLS now gives the left-back the chance to rebuild his career away from the injury problems that blighted his time in Manchester.
Malacia's arrival in Ohio continues a trend of MLS clubs recruiting experienced European talent to strengthen their rosters, with Cincinnati looking to add depth and know-how to their backline as they continue their push in the league.
Despite the frustrations of his United career, Malacia arrives with genuine pedigree, having established himself as a full Netherlands international before his move to England and featured for his country at a major tournament during his time at Feyenoord.