The two Lancashire clubs have agreed a compensation package under the Elite Player Performance Plan for the 16-year-old, who broke into the Stanley first team this year and has played six times for James Beattie's men.
"It is something I have dreamt of for a very long time," Mahoney told Rovers' official website.
"If it was any other club then I probably would have stayed at Accrington Stanley, because I have had a wonderful time there.
"I'm glad this deal has gone through, it is the only one I would have accepted and I just can't wait to get out there now."
Stanley's youth team beat their West Ham counterparts in midweek, suggesting their future is particularly bright, and Beattie thinks Mahoney really shone among his peers.
"Connor is perhaps a stand-out player in an excellent group of academy players," he said.
"He's played league football and withstood it even though he hasn't physically matured yet. He's a very astute young man who knows what he wants and when the interest first arose from Blackburn I let him know straight away. I believe that's right, we looked after him and Blackburn have been spot on throughout the negotiations.
"It's not just been about getting the best financial deal but also the best deal for Connor. It's a massive club and we didn't want him to just get lost in the system. I think he's good enough to do really well there. He's a fantastic young player and I've spoken to (Blackburn boss) Gary Bowyer at length about him and I may well be knocking on his door to get Connor back on loan in the future."
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- Accrington Stanley
- James Beattie