Colville, 22, started out at Huddersfield Town before making the step up into the Bradford City first team.
He joins the Seadogs from Scottish Championship side, Greenock Morton.
"I am looking forward to playing regularly again after my two years at Greenock," he said.
"Obviously, they wanted to keep me but I have moved back home to York after offers elsewhere including down in London and Scotland, but Scarborough seems the perfect fit in order to be playing regular football.
"I know a lot of the players including Dylan Cogill, Ryan Whitley, Nick Hutton and Jimmy Beadle so it will be less daunting coming into the changing room.
"We have had a couple of training sessions together so I have got to know a lot of the squad and staff."