Bulut, 23, leaves Western Sydney Wanderers after scoring six goals in 13 appearances - in the A-League and AFC Champions League - while on a short-term deal.
"I welcome Kerem Bulut to the big family of Iraklis and I am sure he will do everything to help the team achieve its goals next season," coach Nikos Papadopoulos said.Confirmation of the transfer comes shortly after reports in the Greek press claimed that Iraklis - which won promotion to the top flight after finishing second to AEK in the second tier - due to concerns over Bulut's fitness and "explosive character".
"Football saved my life and I'm so grateful and happy to be able to do what I love, as a member of such a big team," Bulut said.
"I am committed fully to work hard together with the other players and help Iraklis move forward."
Bulut - who has represented Australia at U-17, U-20 and U-23 levels - has previously played for Turkish clubs Karsiyaka and Akhisar Belediyespor, as well as Czech side Mlada Boleslav and was at the end of last season.