The 24 year old put pen on paper to keep him with David Moyes’ side until 2016.
Gibson, who is a product of the Manchester United youth system, has failed to impress since his advancement into the first team.
The Northern Ireland born midfielder has had 17 international caps with Republic of Ireland. Although limited to two starts for Manchester United this season, he made 60 appearances for the Champions in his time at the club, scoring 10 goals in the process.
Gibson said upon completion of his transfer:
“It’s a different challenge for me. With Manchester United you’re winning every week, playing well every week.
“Coming to Everton, a great club, they don’t win as many as Manchester United but it’s a great challenge.
“I think it was time for me to move on and I think Everton is the right club for me to be at.
“I think it was the right time for me to leave with Euro 2012 coming up I need to play games as I need to get in the Republic of Ireland team. Being here and playing every week will give me the opportunity to play for Ireland as well.”
Gibbo by the numbers
League Appearances : 31
FA Cup Appearances : 7
League Cup Appearances : 13
European and other Appearances : 9
Total Appearances (As Substitute) : 60 (23)
Yellow Cards : 11
Red Cards : 0