Ward-Prowse, 31, joined West Ham from Southampton in August 2023 and has made 78 appearances for the Hammers.
He was a regular under former West Ham manager Graham Potter and made six appearances this season before Potter was sacked in September.
Ward-Prowse has not played a single minute of football since Nuno was brought in at West Ham.
The Hammers are 18th in the league and five points above the Clarets.
Burnley manager Scott Parker expressed his delight in signing Ward-Prowse and believes the midfielder will add experience to his struggling side.
Parker said: “As soon as I heard of Burnley’s ‘s interest and spoke to the manager, I knew this loan spell was just what I needed,” said Ward-Prowse.
“There’s a big battle between now and the end of the season, but I’m going to relish every moment.”
Ward-Prowse came through Southampton’s academy and made 410 appearances before leaving for West Ham.