Thirlwell, 27 has been on loan at the Cumbrian side since September 2006 but made the move permanent yesterday after failing to find a place in the Rams side.
The undisclosed fee; which has been described as 'substantial' ends a reign of 16 months at Pride Park after he left Sheffield United to Derby County, again for an undisclosed fee.
The Blades, managed by Neil Warnock signed Thirlwell on a free transfer from Sunderland in July 2004, making his debut in the 1-0 home defeat to Reading in August. He went onto play 28 (+ 8 as sub) games whilst scoring just once (v Wolves (h), 3-3). United failed to make the Play-Offs and Thirlwell moved on.
Thirlwell told Carlisle's official website: "It has taken a little bit longer than we all anticipated but we are there now and that is all that matters.
"I have been here a few months already and it has been a really enjoyable time and that is the major reason why I wanted to sign permanently.
"I have been signed on a good contract as well and I am looking forward to my time at Carlisle."
Blades-Mad would like to wish Paul the very best of luck at his new club.