Moore, 26, joined the Bluebirds from Brentford and made just 25 appearances during three years with the club.
"We've got good value, it is a good deal and it is up to him to produce the performances we know he is capable of," Blades boss Chris Wilder said.
"Competition is key and he will provide that in the goalkeeping department."
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Sheffield United have signed goalkeeper Simon Moore from Championship side Cardiff City on a three-year deal for an undisclosed fee.