McAtee, 24, older brother of Manchester City midfielder James, will provide another attacking option at the top of the pitch for the Reds.
The forward was part of the Grimsby Town squad that made history last term in reaching the quarter-finals of the FA Cup – the first side from the
fourth tier to reach that stage of the competition since 1990.
The Salford-born player, whose other clubs include Shrewsbury and Scunthorpe, said: “The move has been in the pipeline for quite a while.
“I was buzzing to come down and get it all sorted.”
Barnsley FC CEO, Khaled El-Ahmad said: “We are happy to welcome John to Oakwell.
"We wish him all the best during his time with the club and look forward to seeing him in action out on the pitch.”