Diouf joined Liverpool for £10m in 2002 after impressing for Lens
El-Hadji Diouf has moved to Sunderland for around £2.5m as the Black Cats continue their rebuilding plans ahead of the new Premier League season.
The Senegal international, 27, had one season left on his Bolton contract but had expressed his desire to leave.
Boss Roy Keane told the club website: "El-Hadji has always been the kind of player opposition teams and supporters love to hate, a thorn in the side.
"That's why we're delighted to now have him in our squad."
Keane added: "He has bags of Premier League and international experience, which is exactly what we've been targeting this summer.
"Our coach, Ricky Sbragia, has also worked very closely with him [at Bolton] and speaks extremely highly of him, so we're looking forward to working with El-Hadji, I think he's a signing that will excite our supporters."
Diouf, who can play as a striker or on the wing, spent four seasons at the Reebok Stadium after initially joining the club on loan from Liverpool.
The player completed a medical at the Stadium of Light on Sunday.
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