The 31-year-old, who made one Test appearance for England in 2003, joins from Hampshire and will add experience to the Old Trafford attack having taken more than 700 first-class wickets during his career.
"Lancashire is a fantastic club with a proud history and great traditions," Kabir said.
"I am excited at the prospect of working under Peter Moores and his coaching team as well as playing alongside Glen Chapple who is still one of the best in the country.
"Lancashire has an exciting and emerging squad and I am looking forward to playing my part in the challenges ahead."
Lancashire cricket director Mike Watkinson added: "We are pleased to bring in Kabir whose experience and proven track record in all forms of the game will be of great benefit to our bowling unit."
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