Passed by the California legislature last month, the measure follows heated national debate after game publisher Take-Two Interactive Software Inc. pulled its best-selling game "Grand Theft Auto: San Andreas" from retailers this summer because of hidden sex scenes.
"I am a parent myself and I think this is extremely important that we know what our kids watch or what kind of games that they play," Schwarzenegger told reporters.
"I am a big believer in those video games. I mean they're terrific, a lot of them are manufactured in California and they're doing a great job," he said at a signing ceremony.
"We just want to make sure it doesn't go into the wrong hands or children under the age of 10 start playing those things because it does have an impact on our children."
The star of many violent movies during his acting days, Republican Schwarzenegger had not previously indicated his position on the issue. Democratic Assemblyman Leland Yee, the bill's author, said he was surprised the governor signed his bill.
The measure bars the sale and rental to minors of games that show serious injury that is determined to be especially heinous, atrocious or cruel. Violators are subject to a $1,000 fine.
Several other states, including Illinois and Michigan, have similar laws, prompting legal fights with the $10 billion video game industry. Courts have ruled against bans in Washington state as well as Indianapolis and St. Louis County in Missouri.
The California law says exposing youths to video violence could result in psychological harm.
"Exposing minors to depictions of violence in video games, including sexual and heinous violence, makes those minors more likely to experience feelings of aggression, to experience a reduction of activity in the frontal lobes of the brain, and to exhibit violent antisocial or aggressive behavior," it said.