He is expected to make his debut in the inaugural match at Audi Field on July 14 against the Vancouver Whitecaps.
Rooney's deal is worth a reported £10 million, meaning he becomes the highest paid player in DC United's history.
"It is fantastic to be joining DC United at such an exciting time in the club's history with the new stadium opening in just a few weeks," Rooney told the DC United website.
"Moving to America and MLS fulfills another career ambition for me. I have the hunger to be a success here and will give DC 100 percent - as I have always done for every team I have ever played for."
David Beckham was the first former England captain to make the move to MLS when he joined LA Galaxy in 2007 while Steven Gerrard made the same move in 2015.
While DC United are not signing the Rooney who was one of the best players in the world when at the peak of his powers with Manchester United and England, it is still a major coup for the outfit.
"This is a seminal moment for our fans and organisation. Wayne is a global soccer icon and his presence at D.C. United will elevate our product on the pitch and soccer as a whole in our city and in this country," said Jason Levien, United managing general partner and CEO.
"Wayne has thrived when competing at the most elite levels of soccer and we're thrilled to have his leadership as we enter this new era at Audi Field."
Rooney burst into the consciousness of English soccer when he made his Premier League debut for Everton aged 16.
He joined Manchester United for $35 million in 2004 and stayed there for 13 seasons - winning five English titles, one Champions League, one FA Cup, three League Cups and becoming the club's all-time leading scorer with 253 goals.
He earned 119 caps for England - a national record for an outfield player - and in 2015 he surpassed Manchester United great Bobby Charlton's England goalscoring record, ending his international career with 53 goals for his country.
Rooney's return to Everton did not quite work out as planned and he was unable to help the club challenge for silverware, despite being their top scorer last season with 11 goals in 40 matches across all competitions.
(Additional reporting by Aditi Prakash in Bengaluru; Editing by Andrew Roche)
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