Priestley, 30, is a former team-mate of Lynch from their days at Southport and he has signed a one-year deal.
Lynch said: “Billy epitomises the type of character I am looking for at the football club.
“We have worked hard to get this sorted and I am delighted it’s over the line.
“Billy has massive experience in the higher levels of the non-league pyramid and has been involved in numerous promotion-winning sides.
“He has shown me that he is committed to Clitheroe for the right reasons and shares the same enthusiasm for where we want to take the football club.
“I know what I will be getting from him week-in, week-out and that’s why he was one of our main targets.”
Burnley-born Priestley was a title winner in the Blues’ current division with Ramsbottom United before helping Salford City secure promotion from the Northern Premier League’s top flight.
The imposing centre-back then tasted National League North football with Southport, FC United (on loan) Alfreton Town and Bradford Park Avenue, where he finished a second spell last season.
He said: “I can’t wait to start this new chapter in my career, playing for a great friend I have previously played alongside.
“He has always been very professional and a dedicated player with a massive heart and desire to win, which he will take into management.
“Clitheroe has always been a good club and now it’s on its way up, I hope everyone will jump on the journey with us.”
Lynch has spoken to all members of last season’s Clitheroe squad, which was very much in the play-off picture when the curtain came down on the season prematurely.