The team did not announce the terms of the deal on Monday, though the Associated Press reported last week he agreed to a $9 million, two-year contract.
Holiday averaged 6.5 points in 27 games for the Bulls two years ago. He played in all 82 games for the New York Knicks last season, averaging 7.7 points. Holiday has averaged 5.7 points over four seasons with Philadelphia, Golden State, Atlanta, Chicago and New York.
The Bulls made the playoffs on a tiebreaker and lost to Boston in the first round.