The deal for the 21-year-old is on a loan deal that runs until the end of the 2014/15 season.
Johnstone, whose father Glenn played ten games for the Club under John Beck in the 1990s, was on emergency loan with Doncaster Rovers, but returned to United in order to complete a move to his hometown club for the rest of the current campaign.
Speaking about the signing, manager Simon Grayson said: “This is a lad we have kept our eye on for some time. We tried to do something in the summer with him and when a player comes available who you think is going to improve the squad, regardless of what you have already, and you have the green light to go and do it, then it’s something you go and do.
“We believe that he is going to be a top goalkeeper. He has been brought up at Manchester United and played for England at youth level and that tells you everything you need to know about him.”
Speaking about the move, Johnstone was excited at the prospect of joining a Club he has plenty of knowledge about, he said: “I’m very happy to be here. It’s my hometown, I grew up in Preston and it is a proud day for me and for my family.
“If anyone else other than Preston had shown an interest in me, the likelihood would have been I would have stayed at Doncaster, who have been very good to me, but this being my hometown club it was difficult to turn down.
“My dad played here a long time ago and he is happy and proud and I am looking forward to playing at Deepdale.”
Speaking about the signing, manager Simon Grayson said: “This is a lad we have kept our eye on for some time. We tried to do something in the summer with him and when a player comes available who you think is going to improve the squad, regardless of what you have already, and you have the green light to go and do it, then it’s something you go and do.
“We believe that he is going to be a top goalkeeper. He has been brought up at Manchester United and played for England at youth level and that tells you everything you need to know about him.”
Speaking about the move, Johnstone was excited at the prospect of joining a Club he has plenty of knowledge about, he said: “I’m very happy to be here. It’s my hometown, I grew up in Preston and it is a proud day for me and for my family.
“If anyone else other than Preston had shown an interest in me, the likelihood would have been I would have stayed at Doncaster, who have been very good to me, but this being my hometown club it was difficult to turn down.
“My dad played here a long time ago and he is happy and proud and I am looking forward to playing at Deepdale.”