
The 28-year-old Algerian international passed his medical Thursday but the loan failed to go through when paperwork from West Ham was blocked in the processing system.
Fifa however gave the clubs special dispensation to complete the loan move when the technical glitch was confirmed as the culprit.
“Lyon are delighted with the arrival of Said Benrahma, an experienced player with nearly 350 matches to his credit at the highest level,” said the struggling Ligue 1 outfit Friday.
Lyon are third bottom in Ligue 1, and are on their fourth coach of the season.
They also had a busy transfer window, bringing in seven players including striker Gift Orban, veteran midfielder Nemanja Matic and defender Orel Mangala.