The 32-year-old Finn's F1 roll of honour includes 18 wins, 62 podiums and 16 pole positions.
'I'm delighted to be coming back to Formula 1 after a two-year break, and I'm grateful to Lotus Renault GP for offering me this opportunity,' Raikkonen said.
'My time in the World Rally Championship has been a useful stage in my career as a driver, but I can't deny the fact that my hunger for F1 has recently become overwhelming. It was an easy choice to return with Lotus Renault GP as I have been impressed by the scope of the team's ambition.
'Now I'm looking forward to playing an important role in pushing the team to the very front of the grid,' he added.
Lotus Renault said it was delighted to have the driver on board.
'All year long, we kept saying that our team was at the start of a brand new cycle. Backstage we've been working hard to build the foundations of a successful structure and to ensure that we would soon be able to fight at the highest level, Gerard Lopez, Chairman of Genii Capital (co-owner of the Renault team), said.
'Kimi's decision to come back to Formula 1 with us is the first step of several announcements which should turn us into an even more serious contender in the future.
'Of course, we are all looking forward to working with a world champion. On behalf of our staff, I'd like to welcome Kimi to Enstone, a setting that has always been known for its human approach to Formula 1,' he added.