The 19 year old Basildon born defender joined the club on loan in January of this year, and during his time at the club, played 21 games and scored one goal which came away to Weymouth in the 9-0 Blue Square Premier win in February.
Confirming the permenant signing to the Official Rushden & Diamonds website, manager Justin Edinburgh said: "People from Ipswich had watched him and seen him doing well. We're delighted to keep him because he has shown great maturity, desire and hunger to do better.
"He isn't happy just to be here. He feels that he can grow and learn as a player. Kurt loves this club and has already settled by feeling comfortable in these surroundings.
"He has certainly coped with the physical side of the Blue Square Premier. That can be a problem for some youngsters coming out of academies. Others take their time or can't cope at all.
"But, just like Curtis Osano when he first came from Reading, we've seen Kurt adapt well to everything. He's also an example of the type of player who we want here with 100 per cent committed performances."
Click here for a player profile on Kurt Robinson.