The Scarlets announced they have agreed terms with ex-Bath and Gloucester playmaker Barkley, whose recent career had seem him play in France at Racing Metro and then Grenoble.
Barkley, 32, was recently released by mutual consent from his Grenoble contract. He left Paris-based Racing last summer.
His Scarlets deal will run until the end of May, and he promises to be a pivotal recruit, especially during the RBS 6 Nations period when league fixtures continue to be played.
"Olly will bring a lot of experience to our squad, both from his distinguished Test and club career in England," Scarlets head coach Simon Easterby said.
"He can cover 12 and 10, and will add much-needed cover for us as we have so many players unavailable during the international call-ups as well as some long-term injuries we have in midfield.
"There was obviously a lot of interest from clubs in the UK looking to securing him after he left Grenoble.
"It will be a boost and will give our team added depth at an important time in our season as we look to kick on in our domestic league.
"It's obvious he is keen to get on to the field and perform well and get some competitive game-time under his belt."
Barkley won 23 England caps, making his Test debut in 2001, while he made more than 160 appearances for Bath during two spells at the Recreation Ground.
"I am excited to be joining the Scarlets for the rest of the season and looking forward to getting plenty of game-time after a frustrating period at Grenoble," he said.
"The Scarlets squad has some fantastic players, and I hope I can add something in the coming months.
"I look forward to working with Simon and his coaching team and joining the players to try and be part of an ambitious team keen to make an impact for the rest of the season."
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