The 23-year-old, who has scored 14 goals this season, has penned a three-and-a-half-year deal at the Madejski Stadium.
"I'm really looking forward to it and I'm very excited," Blackman told Reading's official website.
"I met the gaffer last night, he was fantastic with me and I couldn't have asked any more from him and (director of football) Nicky Hammond. I can't wait to play – hopefully I can try and get involved as soon as possible."
Blackman has had previous spells with Macclesfield Town, Blackburn Rovers, Blackpool and Motherwell.