Born in Wordsley, the 22-year-old, who can also play on the wing, is a product of the Warriors' academy and moves north to link up with the club's defence coach, Billy McGinty, who joined last summer after six years at Sixways.
His arrival augments Edinburgh Rugby's back-three resources, which include the increasingly prominent full-back Tom Brown, wingers Lee Jones and try-machine Tim Visser, the latter available for Scotland selection this summer.
Edinburgh Rugby head coach, Michael Bradley, said: "Mike is a talented young player and is very excited about the opportunity to play for Edinburgh Rugby.
"He's an ambitious young man and arrives knowing that he has to work hard and have a big year to secure a longer term.
"That kind of pressure can bring the best out of players, particularly when competition for places in our back-three is increasingly fierce."
Penn arrived late to the sport for a professional player, picking up the oval ball aged 14 for Starbridge rugby club.
When he was 16 he signed for the Premiership side's Academy before earning selection for England Under-18s and enjoying a successful spell at associated Championship side Birmingham & Solihull.
He then returned to the Warriors to impress for the A side, making four appearances for the senior squad before taking on a second championship loan spell at Nottingham.
Penn checked into the stadium for a fitness test last month and revealed the visit to the ground and the buzz at the club sealed the deal.
"My first thoughts when I arrived were centred around the training facilities and the quality of the coaching staff, particularly their ideas and ambitions to take the club forward," he explained.
"Edinburgh Rugby have been one of Europe's top sides this season so I'm really looking forward to getting in there, working hard as part of a quality squad and proving myself.
"I couldn't ask for much more really. The type of rugby they play really suits me, that's my type of game.
"I like to play the ball and avoid contact using my pace, I can't wait to show it on the big pitch at Murrayfield."
Penn joins eight other new faces making their way to Murrayfield next season, including South African prop WP Nel; All Black back and former Junior World Player of the Year, Ben Atiga; and Welsh caps John Yapp (prop) and Richie Rees (scrum-half), while 19 of the club's top performing players have also extended contracts.
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