Grosskreutz's contract at Stuttgart was terminated after he was caught up in a fight during a night out that ended with him being admitted to hospital with head injuries.
The 28-year-old, who had said he wanted to take a break from the game following the incident, has signed a two-year deal with Darmstadt.
"Kevin has considerable experience and is a world champion and I’ve felt in our conversations he is up for a new challenge and will be a very important building block for our team in the coming season,” Darmstadt coach Torsten Frings said on Tuesday.
Grosskreutz, who was a member of the German squad that lifted the 2014 World Cup although he did not make an appearance during the tournament, won two Bundesliga titles with Borussia Dortmund.
He moved to Galatasaray in Turkey and then to Stuttgart, staying on after they were relegated last season.
Darmstadt, who are 13 points adrift at the bottom of the Bundesliga, look set to play in the second division next season.
(Reporting by Mark Gleeson, editing by Pritha Sarkar)
