McCarthy is likely to play second fiddle to England international goalkeeper Fraser Forster, reports Xinhua.
"We now have two quality English goalkeepers who have both represented the country at international level," Southampton's executive director of football Les Reed said on Monday.
"I am confident that Fraser will soon be England's No.1, and in Alex we have a young player who has already had a taste of the England senior squad, as well as excellent experience at U-21 level.
"Alex is ambitious and will be pushing for a starting place every time he gets the opportunity, which can only be good for Fraser and a shining example for Harry Lewis and the younger keepers below," he added.
"I'm over the moon to join a club like this," McCarthy, who won three caps for the England U-21 side, said.
"The club is known for producing young players and they've had successful seasons," the 26-year-old added.
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