Going in the opposite direction is Liam Henderson, who yesterday signed a new three-year contract with Celtic but was then immediately sent to Hibs on a season-long loan.
Allan, 23, will be officially unveiled at Celtic Park today ahead the game against Inverness Caledonian Thistle. He said it was an honour to join Celtic.
The player was the subject of three bids from Rangers, the club he supported while growing up in Glasgow. All of them were rejected by Hibs who took a firm stance of refusing to sell him to their main rivals for the Championship title this season.
“I am absolutely delighted to sign for Celtic, such a fantastic club,” Allan told the Celtic website. “It is such an honour to be given this opportunity and I can’t wait to get started and play my part in bringing success to Celtic and our supporters.
“There are so many exciting challenges ahead for us now in Scotland and in Europe and I am looking forward to being part of all that lies ahead.
“I know the high-quality of players at the club and I know it will be a big personal challenge for me but it’s one I’m ready for and one I am relishing.
“I would like to thank the many fans who have already welcomed me to the club. I really appreciate this support.”
Celtic manager Ronny Deila said: “We’re really pleased to welcome Scott to Celtic. He’s a player of huge potential and someone who is hungry for success, a young player who can have a big future at our club.”
Allan underwent a rigorous medical yesterday after the Scottish champions had agreed terms with Hibs on Thursday.
Having submitted a transfer request, it was initially believed Allan hoped to engineer a change of heart from Hibs to allow him to move to Rangers.
But when Celtic entered the fray this week, the former Dundee United and West Bromwich Albion player made it clear his personal allegiance to Rangers would present no barrier to him agreeing to join Deila’s squad.
Alan Stubbs, the Hibs manager, last night expressed his delight at bringing midfielder Henderson to Easter Road.
“Liam is one of the best and most talented young players in Scotland,” Stubbs said. “He’s a good, modern midfielder who can score goals, and he has played first team football for both Celtic and Rosenborg [on loan]. He’s an exciting player I rate really highly and I am delighted that he is coming.
“While we were prepared to allow Scott to run down his contract and play his part in an important season for us, this opportunity provides a really good outcome for everyone. Scott gets a move as he wanted, while we bring in a high quality player who is motivated to join us as we push for promotion.”
Hibs chief executive Leeann Dempster said: “Scott goes with our best wishes. Alan is happy with the outcome. We have brought in a talented player on a loan, plus a fee which will help us strengthen the squad for the challenging and exciting season that lies ahead.”