Ligue 1 club have beaten off interest from the Bianconeri and Manchester City to sign France Under-20 international
Monaco have completed the €3.5 million signing of highly-rated Lyon midfielder Fares Bahlouli on a five-year deal.
Bahlouli was linked with Manchester City and Juventus, but it is Lyon's Ligue 1 rivals Monaco who have won the battle for his signature.
The 20-year-old made only four substitute appearances in the league for Lyon last season, but is held in high regard and played his part in France Under-20's Toulon Tournament success earlier this month.
He told Monaco's official website: "I am excited to join AS Monaco. This is a club that is currently building a beautiful project by trusting youth. I cannot wait to see my new team-mates."
Monaco vice-president Vadim Vasilyev said: "Fares will have the opportunity to show the talent that carries him from a young age. We hope it can advance under the direction of Leonardo Jardim and confirm the hopes placed in him."
Lyon revealed that the deal includes a sell-on clause which will see them receive a "significant profit" if and when Bahlouli leaves the Principality club.