The France international, 29, had a medical at The Hawthorns last week but has instead returned to Ligue 1 nine years after leaving Auxerre.
Diaby was released by the Gunners last month after making 182 appearances for the club since 2006, but just two in the last two seasons.
Marseille signed another former Arsenal midfielder, Lassana Diarra, last week.
No details were revealed by Marseille over the length or terms of Diaby's contract.
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Former Arsenal midfielder Abou Diaby has signed for Marseille after rejecting a contract at West Brom.