The England international and former St Helens star was not offered fresh terms at Wasps at the end of last season and has since been linked with a move to a number of clubs both in the UK and France.
Leicester have now managed to get their man and O'Connor believes the 29-year-old centre will be a great addition to the squad at Welford Road ahead of the new Premiership season.
He told the club's official website: "We have some very skilful and exciting players in our backline and Kyle will add to that quality.
"He has an impressive skillset and we're delighted we've been able to bring him into the squad here ahead of the new season."
Leicester will kick off their Premiership campaign on September 1 with a tough trip to Sandy Park to face Exeter Chiefs.