Taylor has signed a four-year deal with the Seasiders.
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"I'm absolutely delighted and excited to be here, as it has been a long time in the making," Taylor told Blackpool's website.
"I have spoken to the manager quite a bit, and where he wants to take this club is very exciting for me and a real inspiration behind the decision to join this massive club."
The 21-year-old has made almost 100 appearances in League One, having had spells on loan with Burton Albion, Wycombe Wanderers and Wigan Athletic, and joins for an undisclosed fee.