Hamilton's career has gone into sharp decline in recent seasons with the medium-pacer suffering the cricketing equivalent of golf's 'yips' and barely able to bowl at all.
Back in 1999 Hamilton, 29, experienced the game's highs and lows when having made 217 runs for Scotland at an average of over 50 at the World Cup, he won a place in England's Test squad for their tour of South Africa.
But his Test debut at Johannesburg was a wretched affair, Hamilton dismissed for two noughts and failing to take a wicket or a catch.
During the past two seasons he has played just three first-class matches for Yorkshire but Durham coach Martyn Moxon, a former Headingley colleague of Hamilton's, has decided to give him a shot at reviving his career.
In a statement, Hamilton said: "I'm really looking forward to a new challenge and a fresh start at Durham," Hamilton said.
"I have known Martyn for several years and it is great to have the chance to work with him again."
Hamilton, who may initially play as specialist batsman, joins a Durham side set to be boosted by South Africa batsman Herschelle Gibbs and Pakistan fast bowler Shoaib Akhtar.