The company have signed a two-year deal with the Clarets and will have their name on all adult home and away shirts, for the 2016/17 and 2017/18 seasons.
The same firm also sponsor Burnley's East Lancashire rivals Blackburn Rovers, but are breaking no rules in having shirt sponsorship deals with more than one club.
They replace Oak Furniture Land as Burnley's shirt sponsors.
Anthony Fairclough, head of commercial affairs at Burnley FC, said: “This has been a lengthy process, involving many different companies of stature all over the world.
"It highlights just how far the club has come as a commercial entity across the globe.
"We have been invited to boardroom tables where previously we would never have had the opportunity.
"However, Dafabet quickly emerged as our preferred partner due to their proven track record within Premier League and we look forward to initiating some of the inventory in our partnership.”
In adhering to strict betting rules, the company have also agreed to offer sponsorship space on all junior shirts to the club’s Burnley FC in the Community scheme.
Mr Fairclough added: “I am particularly pleased Dafabet have also allowed us to project the good work we do in the community onto a world stage, and we thank them for a vision which mirrored our own.”
John Cruces, head of sports marketing and sponsorship at Dafabet, said: “We’re very happy to sign up with Burnley Football Club and are looking forward to building a mutually beneficial partnership. They were deserving winners of the Championship last season and we’ll now be hoping for a successful return to the Premier League.”
Dimitris Karatzas, managing director of online betting and gaming at Dafabet, said “We’ve been busy in increasing our presence in football and we have no doubt that partnering up with Burnley is yet another step forward, we’ll look forward to supporting the club anyway we can.”