The 19-year-old emerged as a target for the Easter Road side late on transfer deadline day with the paperwork being lodged minutes with just minutes to spare.
Tait is set to return to the Stark’s Park club on loan until January 1 but both clubs are awaiting Scottish FA approval for that aspect of the arrangement to go through.
The Scotland Under-21 cap will then return to Hibs early next year with hopes of forcing his way into first-team plans.
Glasgow-born Tait has scored six goals and laid on 11 more for his team-mates in 59 appearances for John McGlynn’s side. He helped the club win promotion to the Championship and won the club’s Young Player of the Year award.
Hibs head coach Jack Ross said: “Dylan is someone that we identified last season as a young player with enormous potential.
“He continued to show his ability in Raith’s early fixtures, and my staff and I are excited about working with him and continuing to develop his game.”
Tait added: “It’s a massive club and I can’t wait to get going. I’ve been playing for Raith in League 1 and the Championship, so this is obviously a massive step up for me, but I’m over the moon to get here.
“I want to continue my form over the next few months and keep impressing the manager here, so when I come back in January the manager will give me a chance. I want to kick on and keep improving.”
Meanwhile, the Evening News understands that Hibs simply ran out of time in their attempts to strike a deal with St Mirren for attacker Jamie McGrath.
Both clubs had reached an agreement for the Irishman to make the move to the Capital with cash plus Scott Allan and Drey Wright heading to Paisley but the complex nature of such a transaction, with the added difficulty of McGrath being away on international duty with the Republic of Ireland, meant the odds were stacked against Hibs and despite the club’s best efforts to get the deal over the line, they had to accept defeat in their pursuit of the player.