The 26-year-old joins the Heart from FK Zeljeznicar, where he played in the Bosnian side's league and cup double last season.
While primarily a defensive midfielder, Heart head coach John Aloisi said Gerhardt can also be used anywhere across the back four.
"Patrick will bring a lot to the club. Defensive midfield is the position we see him most suited to, but he's versatile," Aloisi said.
"He played in Bosnia last year and won the double, so he brings a winning mentality.
"He's also a national-team player with Liberia, so he's got a lot of experience for a young person.
"We've had good feedback from the people we know in Europe, and they've said not only is he a good player, but a good person, and that's an important factor for our club."
Gerhardt, who was born in Switzerland and progressed through the youth ranks at BSC Young Boys, trained in Melbourne last week before completing a medical.
He made his international debut for Liberia in March last year and most recently featured in a 2014 World Cup qualifier against Senegal earlier this month.
"I'm happy to be here. I've seen a lot of nice things here at Melbourne Heart and in the city itself, so I'm confident I'll be happy here in Melbourne," Gerhardt said.
"I had a good experience in Bosnia. We had a great team and enjoyed a fantastic season, losing only a couple of games, but I'm excited by the challenge ahead in Australia."