The season opens Sunday in St. Petersburg, Fla.
Kanaan joins Takuma Sato and E.J. Viso at KVRT-Lotus, and will be behind the wheel of the team's No. 82 car. GEICO will sponsor Kanaan.
"[Team owner] Jimmy [Vasser] and I started talking about joining forces at the end of last season, but the timing was not ideal, and I ended up signing with Gil [de Ferran]," Kanaan said in a statement. "When I became a free agent in mid-February, calling Vasser seemed like a natural thing to do since KVRT was one of the top teams still looking for a driver. Jimmy and I go back a long way. We were rivals during the CART days, but more than that, we have always been good friends, which helped a lot with our negotiations."
Kanaan had signed with de Ferran Dragon Racing in December, but that operation shut down after being unable to line up sponsors.
Kanaan had parted ways with Michael Andretti after last season, ending an eight-year run with that racing organization.