The 22-year-old has featured 53 times for Freiburg in all competitions, including 35 outings this campaign, and will remain with the club until the end of the 2021-2022 season.
Schlotterbeck, who had a spell on loan with Union Berlin last season, has signed a long-term deal with Dortmund that runs through until July 2027.
He is the second new defensive addition for BVB ahead of the transfer window officially opening, with Niklas Sule also set to join from rivals Bayern Munich.
Great to see you, Nico! 👋— Borussia Dortmund (@BlackYellow) May 2, 2022
Borussia Dortmund has signed Nico Schlotterbeck for the 2022/23 season ✍️ pic.twitter.com/CHcs86kZVM
Dortmund confirmed the imminent arrival of Schlotterbeck, who has featured twice for Germany at senior level, on their official website on Monday.
"After consultation with all parties involved, I have today decided to announce my move to Borussia Dortmund in the summer of 2022," Schlotterbeck said.
"In doing so, I want to provide clarity for SC Freiburg, Borussia Dortmund and myself personally.
"It is important for me to be able to fully concentrate on the remaining three games in the season run-in with SC Freiburg, which we hope will be successful.
"After that, I'm looking forward to the new responsibilities with Borussia Dortmund."
Freiburg occupies the final Champions League qualification spot in the Bundesliga with two games to go and also face RB Leipzig in the DFB-Pokal final on 22 May.