The 22-year-old has put pen to paper on a two-year contract with the Lilywhites and will link up with his new team-mates when pre-season training starts in early July.
The forward, who scored against Preston on New Year’s Day, started his career in non-league football before signing for League One side Port Vale last year.
He was sent on loan to Conference Premier outfit Gateshead and made an instant impact, scoring five goals in just seven appearances for the Tynesiders.
Following his return to Vale Park, Hugill made his debut for the Valiants in a 3-0 away win against Crawley Town and scored his first goal for the club in a 3-1 triumph over Shrewsbury Town one month later.
The forward played a key role as Port Vale secured a ninth place finish in League One and received the club’s 2013/14 young player of the year award for his efforts.
Now he will join Simon Grayson’s side as the Lilywhites look to go one better than last season and achieve promotion to the Championship.
On his new signing, the Preston manager said: “He’s not a household name, but what he is, he’s going to be competition for the squad.
“He’s young, he’s raring to go, hungry, he’s a strong, powerful player, and he’s got many attributes that will help us along the way this season and compliment the squad well.”
The player would have been out of contract with the Valiants, however, as he is under 24, a tribunal would have been needed to set the fee if the clubs had not agreed terms of the compensation package.