The 21-year-old joins the Women's FA Cup holders ahead of the 2017 WSL 1 Spring Series, which begins in April.
Her move comes after Sunderland - who finished seventh in the top flight last season - reverted to part-time status.
Widely-tipped as a future England star, Mead earned her first senior call-up in 2015 but is yet to win her first cap.
The Whitby-born forward, who had a contract with Sunderland until 2019, has netted 10 times in 25 appearances for England at various youth levels.
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She won the PFA's Young Player of the Year award in 2016, after being voted as the WSL 1 Players' Player of the Year in 2015.
Mead - who signed a four-year deal with the Lady Black Cats in 2015 - graduated with a degree in sports development from Teeside University in July.
She was Sunderland's top league scorer again in 2016, netting five top-flight goals.
Arsenal, who finished third in 2016, get their league campaign under way at home to Notts County Ladies on Sunday, 23 April.
Arsenal Ladies have signed England Under-23 striker Beth Mead from fellow Women's Super League club Sunderland on an undisclosed-length full-time deal.