Larkin, the No. 18 pick in the 2013 NBA draft, played 72 games with Saski Baskonia in Spain last season and averaged 13.8 points and 5.4 assists. He elected to pass up a $6.3 million option to compete for a spot on a Boston roster that will now feature 16 guaranteed contracts.
Larkin, 24, last played in the NBA with the Brooklyn Nets during the 2015-16 season. His signing was first reported by David Pick.
The Celtics have already formally signed nine players this summer -- including All-Star Gordon Hayward and seven players on rookie deals -- revamping the roster of a 53-win team that advanced to the Eastern Conference finals.
Boston made official Thursday the signings of 2016 first-round pick Guerschon Yabusele and German import Daniel Theis. Boston's other summer signings include veteran Aron Baynes and rookies Jayson Tatum, Ante Zizic, Abdel Nader and Semi Ojeleye. Rookie Kadeem Allen was signed to one of two available two-way G League contracts.
The Celtics also signed Paul Pierce earlier this week so he could retire as a member of the team.
ESPN's Nick Silva contributed to this report.