The defender makes the switch to Fir Park having struggled to get regular action at Celtic.
The 21-year-old left the Scottish Champions having only turned out twice in three years as a professional.
With Emilio Izaguirre in impressive form for the Bhoys since he arrived in 2010, Chalmers has been unable to get a look in at left-back, and the most first team football the youngster has under his belt is from a loan spell at Falkirk last year.
But the defender has been a regular fixture in the Scottish youth groups, and now may finally get a chance to prove himself in the Scottish Premiership at Fir Park.
“He’s a young player with fantastic potential who we’ve tracked for some time," said the Well boss in the Record.
“He’s versatile, mobile with a good range of passing and will add competition in numerous positions in defence.
“He’s got a good pedigree having came through the Academy and played for Celtic’s first team and had significant youth International experience.
“I am really looking forward to working with him over the next few years.”
Baraclough's side defeated Celtic's rivals Rangers in the recent Premiership playoffs, meaning another season of top flight football for the Steelmen, something that was surely essential in securing Chalmers' signature.
The fullback will now battle with veteran Steven Hammell for a position on the left side of the back four.