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Burnley rejected a reported £250,000 bid from Liverpool for Cofie this week.
But the German-born Ghanaian refused to return to training with the Clarets and they agreed he could leave Turf Moor.
Burnley have inserted a 25% sell-on clause in the deal, which also gives them first refusal on any loan deal and a future friendly match with United.
It will be three years before Cofie can sign professional terms at Old Trafford and the friendly game will take place within 12 months of that.
Cofie was signed by the Clarets last summer after he was spotted at a youth tournament in Germany.
"The player was unwilling to come back to Burnley so we didn't have a choice in keeping him here," Burnley operational director Brendan Flood told his club's website.
"He was going to go to one of the clubs chasing his signature and in the end, we all felt that Manchester United was the right option.
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