The 22-year-old attended the Royals' 2-2 Sky Bet Championship draw with Brighton on Saturday before agreeing terms on a three-year contract.
Stam said on Reading's official website: "As we know, Tyler is a talented defender who has played for United's first team
"He can play as a left-back or a left-sided centre-back; he has got great potential in the sense that he is quick and athletic, defensively he is strong and he is good at set-pieces
"As a defender he can go and play high up the pitch as well, and that is what we need in the squad."
Blackett made 12 appearances for United's first team, making his debut in 2014, and also had loan spells with Blackpool, Birmingham and most recently Celtic last season.
He has also featured nine times for England at youth level, most recently for the under-21s in 2014
The signing is Reading's third of the summer following the arrivals of John Swift and Liam Moore
Source : PA
Source: PA