Kawasaki, who spent parts of the last three seasons with the Blue Jays, was a fan favourite in Toronto known for his colourful personality and dugout antics.
The 34-year-old from Japan played in 23 games for the Blue Jays last season and hit .214 (6-for-28). He was not included on the club's post-season roster.
Kawasaki joins a Cubs team that's made significant moves this off-season after being swept by the New York Mets in the National League Championship Series.
Chicago signed outfielder Jason Heyward, infielder Ben Zobrist and starting pitcher John Lackey, while also trading for right-hander Adam Warren.