Bolton manager Sam Allardyce told his club's official website: "Ali has a massive presence in front of goal and will add much needed competition in a key area for us.
"He aspires to be a great 'keeper in the Premiership and we'll certainly give him the platform he needs to become a respected player in the best league in the world."
Al-Habsi added: "I've always wanted to play in the Premiership and it is very special that Bolton want me to play for them.
"The Club is going places and I was impressed with Sam Allardyce's hopes for the future. With my strong ambition and Bolton's desire to be a top club in Europe, the partnership fits perfectly.
"The move itself is a big step because I'm still young and I have a good future ahead of me. I feel honoured that moving to England has come true. This is a big deal for the history of Arabian and Asian football because I will be the first goalkeeper from the region to play in the English Premier League."