This follows the announcement that Robbie Stockdale has been transfer listed, just five months after joining from Rotherham. The club are not seeking a transfer fee from anyone who wants to sign the Scottish international from them.
Manchester-born Lynch, who has also been tried in central defence and midfield before, will compete with Marc Joseph and England Under-20 international Scott Wiseman for the right-back place. Alton Thelwell will also be given the chance to prove his fitness and ability in pre-season if he wants to earn a new contract here.
With Keith Andrews, Scott McPhee, Curtis Woodhouse and Sergio Leite already snapped up, Lynch becomes Taylor's fifth signing of the summer.
He will end his interest in Gillingham's Nicky Southall after capturing Lynch.