The 22-year-old is Dortmund's sixth signing of a difficult summer transfer window. Guerreiro has completed his medical and signed a deal until 2020.
Borussia Dortmund on Thursday completed the signing of 22-year-old Lorient left-back Raphael Guerreiro. The Bundesliga club beat off competition from English Premier League pair Arsenal and Liverpool to secure the services of the Portuguese international.
Guerreiro is currently with his national team at the European Championships and played the full 90 minutes as Portugal drew 1-1 with Iceland on Tuesday. An attack-minded left-back, he played 34 of 38 matches for Lorient last season in Ligue 1.
"Raphael Guerreiro is a technically skilled player who feels at home in several positions. We are very happy that he chose Borussia Dortmund," said sporting director Michael Zorc in an official club statement.
Guerreiro is Dortmund's sixth signing of the summer after Sebastian Rode, Emre Mor, Marc Bartra, Ousmane Dembele and Mikel Merino. Thomas Tuchel has lost the services of Mats Hummels and Ilkay Gundogan, while Henrikh Mkhitaryan's future is also the subject of speculation.