The 20-year-old, who was born in Hamburg and is of Ghanaian descent, has penned a three-year deal with a Club option of a further year.
A powerful centre-half who can also operate in midfield, Arthur has been a regular for the Hatters in the National League this season, making 32 appearances and scoring two goals.
Speaking after completing his move to the KCOM Stadium, Arthur said: “I’m very happy to be a Hull City player. It’s something that’s been going on for a while now and I’m just excited to finally join the club.
“I’ve had a good chat with the gaffer and I like him as a person. I’m looking forward to working with him and getting to know my new team-mates. I just can’t wait to get going.”