"We announce our allegiance to the Caliph of the Muslims, Ibrahim ibn Awad ibn Ibrahim al-Husseini al-Qurashi," Boko Haram leader Abubakar Shekau said, referring to IS leader Abu Bakr al-Baghdadi.
The eight-minute speech, in which Shekau was not shown, was published on a Twitter account used by Boko Haram and subtitled in English, French and Arabic.
Shekau has previously mentioned al-Baghdadi in video messages yet stopped short of pledging formal allegiance.
But there have been increasing signs that the Nigerian militants, whose six-year insurgency has claimed more than 13,000 lives and left 1.5 million people homeless, has been seeking a closer tie-up.
Not only did Shekau announce last year that the captured town of Gwoza in Borno state was part of a caliphate but in recent weeks Boko Haram videos have increasingly resembled IS group propaganda.
Nigeria's President Goodluck Jonathan, who has persistently blamed the violence on outside forces, last month claimed the country had intelligence on Boko Haram links to IS but did not elaborate.
Sunni jihadist specialist Aaron Zelin, a senior fellow at the Washington Institute of Near East Policy, said it was difficult to assess the immediate effect of Shekau's statement.
"Definitely it will put an even bigger target on their back," he told AFP in an email exchange.
He added: "It's relevant because it highlights the resonance of the idea of the caliphate.
"For years there have been rumours of connections with AQIM (Al-Qaeda in the Islamic Maghreb) or Al-Shebab but there was never anything definitive... and now (Boko Haram) decides to do this overtly."
The announcement came as Boko Haram is apparently pummelled out of captured territory by the Nigerian army and its allies and as it returns to its previous campaign of urban guerrilla warfare.
Boko Haram fighters were this week reportedly amassing in Gwoza -- which is generally considered to be the group's headquarters -- possibly in preparation for a military offensive.
The Nigerian army has claimed a series of successes in recent weeks, including the recapture of Baga on the shores of Lake Chad, where hundreds of people, if not more, were feared killed in January.
On Saturday, the military said the militants had been ousted from Buni Yadi and Buni Gari in Yobe state after previously announcing the recapture of Marte in Borno state on Thursday.
With Boko Haram squeezed out of captured territory, security analysts have predicted a rise in bomb attacks in towns and cities, including to disrupt elections in three weeks' time.
On Saturday, a woman with explosives strapped to her body blew herself up at about 11:20 am (1020 GMT) at Baga fish market in the Borno state capital, Maiduguri.
About an hour later another blast rocked the popular Monday Market, causing chaos as locals voiced anger at security forces who struggled to control the scene.
Just after 1:00 pm a third blast hit a used car lot which is attached to the busy Borno Express bus terminal.
There were indications that the second and third blasts were also carried out by suicide bombers but details were not immediately clear.
Borno's police commissioner Clement Adoda gave a toll of 58 dead "for the three locations" in Maiduguri and 139 wounded.
"Normalcy has been restored," he added, declining to give further details.
Danlami Ajaokuta, a vigilante leader whose fighters have been working with military across the northeast, said the fear of further attacks had prompted the closure of all businesses in Maiduguri.
Borno state's Justice Commissioner Kaka Shehu blamed Boko Haram and described it as a response to the defeats suffered by the insurgents in recent weeks.
"The terrorists are angry with the way they were sacked from towns and villages and are now venting their anger," he said.
- Election fears -
Nigeria postponed its elections initially scheduled for February to March 28 after security chiefs said they needed more time to weaken Boko Haram.
While reported victories in the remote northeast may enable polling in areas previously controlled by the insurgents, rising unrest in Maiduguri is likely to raise fears as election day approaches.
Shekau has vowed to disrupt the vote and widespread attacks, especially near polling stations, could prove disastrous.
Hundreds of thousands of people displaced by the conflict are living in Maiduguri, swelling the city's population to well over two million.
Residents have voiced overwhelming support for opposition leader and former military ruler Muhammadu Buhari, who is thought to be running neck-and-neck with President Jonathan.
Buhari, a Muslim from the north of religiously divided Nigeria, is expected to poll well among those hit hardest by Boko Haram violence.
But Jonathan, a Christian from the southern oil producing Niger Delta region, is still seen as having considerable support in many areas and analysts have said the likely result is still too close to call.