The midfielder, who has been with the Baggies since joining their youth setup in 2004, has agreed a four-year contract with the Championship side for an undisclosed fee.
Head coach Steve McClaren told the team's website: "We're really pleased that George Thorne has joined us on a permanent basis. I am sure the fans will be delighted to welcome him back and we're equally pleased that he sees Derby County as the right place for him at this point of his career.
"He was one of the first players I spoke about with our Head of Football Operations Chris Evans when he arrived in November, and we were well aware of his qualities when he joined us on loan in January.
"It's taken a lot of hard work for us to get to this stage but I think it says a lot about where we are at as a club that we've been able to bring someone like George in permanently."
Thorne had a loan spell with Derby last season, scoring two goals in eight appearances for the Rams.