The fee could rise to a staggering £58m (one of the adds on include a clause should he one day win the Ballon D'or).
The 19-year-old becomes United's third most expensive player after Angel Di Maria (£59.7m) and Juan Mata (£37.1m) and has been given the number nine shirt by Louis van Gaal.
"I am so excited to be joining Manchester United, I have always wanted to play in the Premier League and to play for the biggest club in the world is what every young footballer dreams of." said Martial.
A France Under-21 international who has just been called up to the senior national team for the first time, Martial scored 32 goals in 21 games at youth level for Lyon before joining Monaco.
The club's failure to qualify for the Champions League group stage was thought to be an important factor in the deal.
Meanwhile, the most dramatic transfer saga of the summer slumped to a massive anti-climax as David de Gea's expected move to Real Madrid collapsed in the final moments of the window.
Real have had 62 days to get the deal done but missed the deadline by two minutes as they failed to submit the paperwork in time, so De Gea is staying at Old Trafford, as is Victor Valdes despite his spat with the manager.
Martial is certainly not the big name "X Factor" striker we were hoping for orexpecting and his signing looks somewhere between a panic buy and a massive gamble, but despite the last minute nature of the transfer, United said that he had been on their radar for some time.
The price tag is - quite frankly - simply astonishing for such an unknown quantity who most fans in England had not heard of until yesterday, but van Gaal said:
"Anthony is a naturally talented, young, multi functional forward with great potential.
"We have been watching him for a while and he has developed immensely during his time at Monaco."
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