"Having decided that I needed a change from both a personal and playing point of view, I spoke to clubs in Japan and France, and concluded that the best way forward for my development was to move to England," O'Connor said in a statement on the club's website.
Confirming the contract will run until the end of the season in May, London Irish director of rugby Brian Smith added: "James is a world-class player and a terrific kid and it is fantastic to have him at London Irish.
"He will bring a huge amount of experience to our group and will fit in well to our style of play. He is fit and ready to play so the coaching group will get him up to date on everything and hopefully he'll be ready to go this weekend."
London Irish, known as the Exiles, are currently 10th in the 12-team Premiership with two wins from six matches, and also play in Europe's second-tier competition the Amlin Cup.
After the Rebels announced they would not offer the O'Connor a new deal after two injury-hit seasons in Melbourne, the only Australian team interested in his signature was his former club the Western Force.
However, he ended negotiations with the Perth-based side, saying he needed a fresh start overseas.
(Reporting by Josh Reich; Editing by John O'Brien)
