Virtanen joins from Finnish Premier Division side IFK Mariehamn, and has represented Finland at under-21 level.
"Otso is someone we've been tracking for a while and I'm delighted that we have concluded the deal," head coach Alan Stubbs told the club website.
"He is a keeper with lots of potential that we're looking forward to developing."
The 6ft 5in goalkeeper becomes Hibernian's fifth signing of the January transfer window, following the additions of strikers Chris Dagnall and Anthony Stokes, defender Niklas Gunnarsson and midfielder Kevin Thomson.
Hibernian have signed 21-year-old Finnish goalkeeper Otso Virtanen on a three-and-a-half-year deal.