The 23-year-old striker left Stenhousemuir this summer and was wanted by several Scottish clubs.
He has instead signed a deal with the NIFL Premiership side, managed by ex-Rangers player David Healy.
Announcing the signing, Linfield said: “Linfield are delighted to announce the signing of 23-year-old Scottish striker Matt Yates, subject to international clearance.
“Yates is a Rangers Academy graduate who most recently played in Scotland’s League One with Stenhousemuir FC.”
Healy said: “Matt is a talented forward with proven experience in senior football at such a young age.
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“He’s a natural goalscorer with the intelligence to link play and has shown the hunger to improve further.
“We believe he’ll be a strong addition to our attacking options this season.”
Yates began his career in the Rangers academy, reaching the under-18s and B team.
He then had a short stint at Hibs before moving to Stranraer in the 2020/21 season.
After two seasons, he joined League Two rivals Stenhousemuir, where he scored 17 goals in his first season and helped the team secure their first league title and promotion to League One.