Finch, who scored handsomely against England in their recent limited-overs series, credited Australia coach Darren Lehmann for helping him make up his mind.
"When I heard Yorkshire was interested in signing me, I had no hesitation in signing," the 27-year-old told the club's website.
"I had a good chat with Darren Lehmann and he recommended that I joined the club. He can't speak highly enough of the place and Yorkshire's loyal supporters.
"I hope to play in all formats whilst I'm at the club and even though the T20 season will be very exciting, I'm looking forward to testing myself in red ball cricket too."
With axed England batsman Kevin Pietersen also agreeing a deal to play for Surrey, the English T20 season is set to receive a boost.
"I'd definitely back him (Finch) to score more runs for us than Kevin Pietersen does for Surrey," Yorkshire chief executive Mark Arthur was quoted as saying by the Guardian newspaper.
"He's an exciting player and a box-office signing, both for Yorkshire and for English cricket."
(Writing by Sudipto Ganguly; Editing by John O'Brien)
