The 27-year-old midfielder revealed on Wednesday that Tottenham had reached an agreement with Dynamo over a deal, and his new employers confirmed the transfer in a statement on their website.
"After successful negotiations, Niko Kranjcar has signed a four-year contract with Dynamo Kiev," the statement read.
Tottenham manager Harry Redknapp signed Kranjcar from Portsmouth in 2009 and he made a big impact in his first campaign, scoring five goals and providing many assists from the left flank in 32 appearances.
But the emergence of Gareth Bale meant the Croatian dropped down the pecking order the following season and only made nine Premier League starts in 2011/12, although his campaign was curtailed by a knee injury.
Although Tottenham are yet to confirm the sale of their player, it is anticipated the deal will be officially signed off once the international transfer window opens on Saturday.
Dynamo had tried to sign Kranjcar twice before, most recently last summer, but the Ukrainians balked at the transfer fee Spurs quoted for their versatile midfielder.
The Croatian, who is currently on international duty at Euro 2012, is eager to repay the faith shown in him by Dynamo Kiev chairman Ihor Surkis, who is reported to have paid £5.5million for the player's services.
When asked why he joined the Champions League qualifiers, Kranjcar said on Dynamo's website: "The perseverance of Surkis.
"I know he wanted to sign me back in 2003 when I was at Dinamo Zagreb.
"Many years later Kiev again tried to sign me, and Surkis personally took control of the negotiations.
"I thought the price was too high that Spurs wanted for me last year and I thought then they would not come back for me, but Surkis again entered the fray.
"He has tried so hard to sign me that I simply had to pay him back.
"I want to make a good impression on him and the fans.
"This is one of the most respectable clubs in eastern Europe."
Kranjcar admitted he will leave Tottenham with a heavy heart, but said the time was right to move after he grew frustrated at the lack of first-team opportunities at White Hart Lane.
"That club means a lot to me. It has been great," he told Sky Sports News.
"I wanted to play more but I played some great footballers. Harry Redknapp has been a big part of my career - he is the one who brought me to Portsmouth and believed in me there.
"Obviously, he then took me to Spurs. After a great first season, where we made the Champions League and played a lot of matches, the last two were quite disappointing because you want to play football.
"That's what you grow up wanting to do."
The Liverpool 2013/14 soccer jersey is available for pre-order. The Reds are eager to compete for silver next season.
Ajax has released their away soccer jersey for the 2013/14 season. Get in the Gear.
One of the top soccer cleats for control the Nike CTR360 will not let you down on the field in tight spaces.
Chelsea won the Europa League on Wednesday. The Blues defeated Benfica 2-1 on injury time goal from Ivanovic.
The adidas Nitrocharge is the most talked about new cleat in years. It was released on May 15 and will take your pitch by storm.
The Juventus jersey for the 2013/14 was released earlier this week. Be the first to wear the colors of the Old Lady.
adidas has added some color to the Predator line with this new colorway. Released on May 17. Be the first to own a pair.
Borussia Dortmund hears Wembley Calling and are headed to London for the Champions League final.
The push for more color on their cleats, adidas has added the infrared colorway to the adiZero f50 Line.
Bayern Munich are kings of Germany and hope to be crowned kings of Europe at Wembley later this month!