During the summer, the Baggies brought in the centre-back on a season-long loan deal, with a clause in their agreement with Al Ahly stating that they could push through a transfer during his year at The Hawthorns.
Amid reported interest from other Premier League clubs, West Brom have opted to hand the Egyptian international a four-and-a-half-year contract and head coach Alan Pardew has admitted that he is delighted with the deal.
The 56-year-old told the club's official website: "This is great news for the Club - Ahmed has been absolutely terrific for me since I arrived and I am sure there is even more to come from him in the future.
"He is one of the players we can build around on the road ahead. He has a big role to play and it is good for the player and the Club to remove any doubts and make the transfer permanent. I'm sure it is something the supporters will also welcome."
Hegazi has started in each of West Brom's 18 league fixtures this season.