The highly touted Canadian basketball prospect made his decision at a television event on Wednesday.
The six-foot-five guard from Kitchener, Ont., was reportedly courted by 30 schools and was said to have narrowed his choice down to either Kentucky and Oregon heading into Wednesday's decision.
Kentucky made it to the Final Four of the NCAA men's basketball championship last season with a roster that included Saskatoon's Trey Lyles, who is expected to go in the first round of Thursday's NBA draft.
Murray was named the most valuable player of the 2015 Nike Hoop Summit all-star game, where he led the world team with 30 points in a 103-101 win over the United States Selects.
The annual Hoop Summit pits the top high school players in the U.S. against the top high schoolers from around the world. Past players include Kevin Garnett, Derrick Rose, Kevin Durant, John Wall, Dirk Nowitzki and Tony Parker.
Murray also represented Canada internationally in the 2014 FIBA under-17 world championship and was invited to the 2015 NBA Basketball Without Borders all-star camp.