The 24-year-old is the club's third signing during the transfer window after winger Jack Harrison returned on a season-long loan from Leeds and Aston Villa midfielder Tim Iroegbunam arrived on a permanent deal.
Ndiaye moved to France last year from Sheffield United after scoring 14 goals in their promotion-winning Championship campaign of 2022/23.
But he found the net just four times in 46 appearances for Ligue 1 team Marseille.
"I'm so excited. I want to come in and carry on from the team's progress last season," the Senegal international told Everton TV.
"I feel like I'll be ready to help and I just want to give it my all to get this club higher up the table."
Everton were one of the lowest-scoring sides in the Premier League last season, managing just 40 goals in 38 matches.
Manager Sean Dyche, whose team finished 15th in the league, said: "Iliman adds versatility to our attacking options and strengthens our forward line as we look to build on the progress we made as a team last season in terms of chances created.
"He is still young but has experience at European and international level and we feel he will be a really positive addition to our squad."
