Sangakkara has played for the national side for the past decade and is one of international cricket’s most consistent batsman with a Test average of 55.10.
The 32-year-old will join up with his new county after the ICC World Twenty20 and the proposed Asia Cup.
“Kumar is a hot property at the moment and rightly so,” said Lancashire’s head coach Peter Moores.
“He is arguably the most consistent batsman in international cricket with an outstanding average in all formats, making his signing a real coup for Lancashire.
“Not only will he bring his qualities as a player to the squad but his experience and knowledge will be invaluable.”
Sangakkara follows in the footsteps of fellow team-mates, Muttiah Muralitharan and Sanath Jayasuriya in representing Lancashire.
“I am thrilled to be joining Lancashire and really looking forward to representing a club and county that has such a long and distinguished cricketing history,” said Sangakkara.
“Murali always talks fondly of his times at Lancashire so I had no hesitation in accepting the club’s kind offer to play for them in the upcoming season.”
“Kumar is an excellent batsman and proven match winner,” said Lancashire cricket director Mike Watkinson.
“He has all the attributes and qualities we look for when signing an overseas player and is someone we know can make a significant contribution in all three competitions next season.”
Sangakkara is likely to miss the first six weeks of the domestic season due to representative commitments, which gives an opportunity for the club to bring in someone else as cover.
“The first part of the season is full of Championship cricket, so myself and Peter Moores are looking at our options in terms of cover for Kumar during this period,” said Watkinson.
“We do have some talented home grown batsmen in our squad but it’s important that we start the season off as strongly as possible and if the right overseas player is available, then that would be an ideal solution.”
