Pietersen, 24, included in England's squad for the forthcoming One-day series in Zimbabwe, left Nottinghamshire at the end of the summer having spent four seasons at Trent Bridge.
He is the third signing in a week for Hampshire, newly promoted to the First Division of the County Championship, following former Nottinghamshire colleague Richard Logan, a pace bowler, and Zimbabwe all-rounder Sean Ervine.
"The enthusiasm, passion and ambition of those in charge of Hampshire is what impressed me most and I want to help them win some silverware. If I am doing that it will also put me in the spotlight," said Pietersen.
The hard-hitting batsman has been a controversial figure since turning his back on the chance of representing the country of his birth because he believed his progress was being hampered by a racial quota system.
Pietersen appeared to be leaving Nottinghamshire 12 months ago following a high-profile row with captain Jason Gallian but was persuaded to see out the final season of his contract and offered new terms following a successful promotion campaign.
"I believe Kevin Pietersen is the most exciting prospect on the County circuit," said Hampshire captain Shane Warne.
"He is a real match-winner and a welcome addition to our great squad who will fit in with our guys beautifully," added the Australia leg-spinner, currently on tour in India.
"As well as strengthening our batting, his off-spinners will be an added bonus. I was very impressed with him when we played each other and I am very excited to have a player of his quality join us at Hampshire.
"I will do all I can to assist him in his continuing development in the coming seasons."
Pietersen averaged over 50 in his past two seasons at first-class level and has become one of the biggest hitters in the English domestic game after pledging loyalty to his mother's country.
Hampshire manager Paul Terry added: "I am delighted that we have picked up a player of Kevin's class, the explosive batsman that I feel we have lacked and one who is capable of turning a game on its head very quickly.
"He is ambitious and hungry to succeed and the England selectors have already shown how highly they regard him."
Despite the fact that the Trent Bridge pitch has sometimes proved tough for batsmen, Pietersen said he had no problems about moving to Hampshire's bowler-friendly surface at the Rose Bowl.
"It would be easy to have gone to a club with a comfortable flat wicket and score a pile of runs but I see the Rose Bowl as a challenge, and I believe that things are improving there all the time," Pietersen said.
"I feel confident of scoring runs wherever I play, I will always back myself to perform."
Pietersen and Warne could find themselves on opposite sides during Australia's 2005 Ashes tour of England if the Hampshire new boy's international career takes off.