The Turkish-German has signed a two-year deal at the ESPRIT arena, with neither club announced any transfer fee agreed between the two.
Ayhan could make his debut against SpVgg Greuther Fürth, after the international break, on Sunday 11th September.
A superb signing
The 21-year-old spent last season on loan at Eintracht Frankfurt and despite their defensive woes, only made two appearances.
While with the club he has grown up with, Schalke, he featured 30 times in the Bundesliga for the Royal Blues and will be keen to show them what they're missing.
Between the Gelsenkirchen outfit's under-19 and under-17 sides, he talled 99 appearances and an impressive 39 goals and 22 assists.
Ayhan is comfortable across the back four, on either flank, and can also fill in as a defensive midfielder. That versatility will be key to getting game time.
He is their eighth summer signing after the arrival of the likes of Rouwen Hennings, Marlon Ritter, Jerome Kiesewetter and Özkan Yildirim.
Ayhan will face strong competition in his preferred role as centre-back, with Robin Bormuth, Kevin Akpoguma and Alexander Madlung already at the club.
Funkel has his say
Speaking to the club website, manager Friedhelm Funkel gave his thoughts on Ayhan's decision to make the move.
Funkel was very pleased, "Despite his young age, Kaan Ayhan has collected plenty of experience in the Bundesliga and Germany and Turkish youth national teams."
The head coach added, "He is able to play across the defence, whether that be as a centre-back, on the right-hand side of the back four or also as the six."
Funkel concluded, "Also, in terms of his future development, Kaan Ayhan is a big bonus for our team."