The 30-year-old defender becomes Mick McCarthy's second signing since taking over at Portman Road, following the acquisition of Kelly Youga on a short-term contract.
Orr has made 12 appearances for Rovers this campaign, following successful spells at Bristol City and QPR.
But he said off-pitch matters at the club led him to believe he should go elsewhere.
"There were a few things going on in the upper echelons of the club at Blackburn and I wanted to get out on loan," he said.
"Once I heard of Ipswich's interest I was really keen to come down here. Thankfully we've managed to get something sorted and I'm absolutely delighted.
"I know Ipswich well from playing here a number of times. It's a big club and it's an honour to be here."