Mohamed will link up with Micky Adams' men next month when his contract at Cheltenham expires.
The 28-year-old left-sided attacker turned down the offer of a new deal with the Robins, who were beaten in the League Two play-offs, in favour of a switch to promoted Vale.
He said: "I am excited. League One is a fresh start and a new challenge in my life.
"I had a good two-years at Cheltenham but I am looking forward to League One now.
"I've played for Swindon in League One but didn't really have a chance. I played about nine or 10 games, a couple of sub appearances, this will be a better chance for me.
"I like the gaffer, I like what he has done in the past, I knew he liked me and Port Vale are moving on and pushing from last season.
"Last season Vale were flying, they were at the top of the league all through the season, they are a strong team and I am looking forward to joining them."
Cardiff-born Mohamed made 47 appearances or Cheltenham last season in all competitions, scoring seven goals.