The 30-year-old centre-back moves to MLS after ending his 21-year association with Newcastle earlier this summer when his contract expired.
The 30-year-old joins the club after fellow centre-back Nat Borchers was recently ruled out for the rest of the 2016 season with a ruptured Achilles tendon and is set to partner former Aston Villa and West Bromwich Albion man Liam Ridgewell in the heart of the defence.
He previously spent 21 years with Newcastle before leaving the Championship new boys earlier this summer when his contract expired, and Timbers head coach Caleb Porter believes the ex-England Under-21 international’s experience will prove crucial to his team’s fortunes over the second half of the campaign.
"Steven Taylor gives us a proven piece that can step into our backline and perform immediately,” Porter told Timbers.com. “His experience and leadership will be very important to our team down the stretch."
Portland general manager Gavin Wilkinson added: “Taylor is a player with a wealth of experience in the English Premier League and will be a good fit in our club. This addition addresses a positional need at a critical stage of the season.”
Taylor first joined Newcastle in 1995 and progressed through the club’s youth ranks to make his senior debut in March 2004 after signing his first professional contract 12 months earlier.
The London-born stopper went on to make 268 total appearances for the Magpies, scoring 15 goals, but saw his minutes limited over recent seasons due to string of injuries.
He did have the chance to extend his spell at St James’ Park this summer after being offered a new one-year deal on significantly reduced terms, but he ultimately decided that the time was right to move on.
"It will be a huge wrench to leave Newcastle,” Taylor told the club’s official website back in June. “But I've been offered exciting opportunities both in the UK and abroad and I'm really looking forward to my next challenge.
"I've loved my time at Newcastle. I'll always be a huge fan of the club and I'll be returning to St James' Park as a supporter whenever I can."
The Timbers, meanwhile, sit one spot outside the Western Conference’s playoff places in seventh following last Sunday’s 1-0 loss at Sporting Kansas City, having recorded seven wins, eight draws and suffered eight defeats in their 29 games to leave them with 23 points.