The player told the club's official website: 'I am very pleased to begin a new experience in the Premier League.
'I look forward to being part of Bolton Wanderers and to start playing in a season that will be very important for the team and for myself.'
Allardyce told the club's official website: 'I'm pleased the deal is sorted out. The player's medical was fine and we have now sorted out the work permit.
'He is an exciting acquisition for us and will add much needed strength to our midfield.'
Nakata has won over 60 caps for his country and is expected to feature for Japan at the World Cup next summer with Zico's side already qualified for the tournament.
He first burst onto the club scene with J League side Bellmare Hiratsuka winning the Asian Footballer of the Year in 1997 and joining Perugia in 1998 and retained the continental player accolade.
Roma signed him for £13million in 2000 and he won the Serie A title with them a year later.
Parma then paid £18million for the player but he failed to shine with the northern club and moved on to Bologna before joining Fiorentina last year.