The winger - who came through the ranks at Manchester United - has signed a two-and-a-half year deal with the Scottish club.
Hibs coach Shaun Maloney said: "I'm delighted to sign Demetri. He brings excellent attributes in different positions and will help us in both attacking and defensive situations.
"As a player, he brings real technical quality and outstanding speed, particularly in one vs one situations. My staff and I look forward to working with him."
Mitchell began his career at Old Trafford and made his top-team debut in the Premier League against Crystal Palace in 2017.
A loan spell at Hearts followed before a permanent move to Blackpool.
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