The Frenchman raced for Renault in the second half of the 2009 season, but was in a back-up role this past season while also claiming the 2011 GP2 Series crown.
"I am thrilled to be one of the team's race drivers in 2012," Grosjean told the team's official website.
"There's a big grin on my face at the prospect of getting behind the wheel of next year's car, and I feel very privileged to be given this opportunity. To be racing alongside a former world champion and someone who is hungry and returning to Formula One will be a great experience, and I'm sure will help raise my level of performance too."
Grosjean has seen off competition from Vitaly Petrov and Bruno Senna to claim the second seat at Renault - which from 2012 will be known as Lotus - despite indifferent results during his last spell in Formula One.
Grosjean started seven grands prix in 2009, but never finished higher than 13th while retiring twice.
While working as a third driver for the team last season, Grosjean won the GP2 crown to convince team bosses he could succeed.
"I feel that my successful season in GP2 Series has helped me mature a lot, and I am a much more complete driver than I was last time I was competing in this sport," Grosjean added.
"Returning to Enstone as a race driver feels like coming home. I will not disappoint and I wish to thank all the people without whom this return to F1 would not have been possible."
Team principal Eric Boullier added: "I'm delighted that Romain Grosjean will join Kimi next year. Romain has shown a lot of maturity in the past 12 months both through his GP2 Series victory and his development as third driver with us.
"We were impressed when he drove for us in the first practice sessions in Abu Dhabi and Brazil. We are confident that drafting him in to one of our driver's seats will help us in our rebuilding process.
"I would like to thank Vitaly Petrov and Bruno Senna for their contribution to the team's performance this year and I wish them all the best for the future."