Essex Head Coach Paul Grayson said he was delighted Mahmood had joined the club.
"I like cricketers who feel they have point to prove to people and he has lots of ability, he's experienced and he's a fit guy who can bowl with good pace as well so we feel Saj will be a real addition to the squad."
Former England fast bowler Sajid Mahmood has signed for Essex.
The Bolton-born paceman was released by former employers Lancashire, his county side for a decade, in September.
The 30-year-old collected eight Test and 26 one-day caps for his country but last featueed in 2009.
Mahmood said: "I am delighted to be joining Essex. Playing at Lancashire was a great experience for me and I thank them for all they did for my cricket. I see this move as a new beginning and can't wait to get started.