Venezuelan Pastor Maldonado has been named as Lotus' driver for the 2014 season alongside France's Romain Grosjean, the team officially confirmed on Friday.
Maldonado has spent three seasons with Williams, winning the Spanish Grand Prix in 2012, but only notched up one point this season with his 10th place in Hungary.
The 28-year-old, supported by state-owned Venezuelan oil and gas giant PDVSA, announced at the start of the month he was quitting the team, leading to talks with Lotus and Sauber.
"It is a fantastic opportunity for me to join Lotus F1 Team for 2014," said the Venezuelan, who focused his efforts on Lotus since the season-ending Brazilian Grand Prix.
"It's no secret that I have wanted a change of scene to help push on with my Formula 1 career and Lotus F1 Team offered the very best opportunity for me to be competitive next season.
"The regulations and cars will change significantly so it is a very good time for a fresh start. I can't wait to be racing in black and gold."
The Venezuelan should bring 35 million euros ($47.7m) annual sponsorship from PDVSA to the financially struggling Lotus team, who failed to pay Finn Kimi Raikkonen part of his salary this season.
Raikkonen, who joins Ferrari next season, missed the last two Grands Prix of the year in the United States and Brazil after deciding to undergo back surgery.
Team Principal Eric Boullier said: "With Romain and Pastor I believe Lotus F1 Team will be able to cause quite a few surprises next year."
Lotus finished fourth in this season's constructors' championship.
Grosjean had a strong finish to the season with four podiums in five Grands Prix before an engine blow-out in the final race in Brazil.
"I am very happy to have official confirmation that I will be continuing to drive for Lotus F1 Team next season," said Grosjean.
"This past year has been tremendously satisfying for me.
"I am very excited about next year's car and I cannot wait to get out on track for pre-season testing before heading to Australia for the first race of the season."