Maldonado replaces Ferrari-bound Kimi Raikkonen at the Enstone-based team, the Venezuelan partnering Romain Grosjean who has been retained for a third season.
Lotus have been forced to move for Maldonado given he continues to be heavily sponsored by Venezuela's state-owned oil and gas giant PDVSA.
Although Nico Hulkenberg was team principal Eric Boullier's first choice, that was only on the proviso Lotus tied up a deal for the Quantum Motorsports consortium to take a 35 per cent stake in the team.
However, with talks with Quantum Motorsports having failed to reach an agreement as yet, Boullier has had to turn to Maldonado over Hulkenberg, who is set to return to Force India after a year with Sauber.
Boullier said: "It is with great pleasure that we can formally confirm that Romain Grosjean will continue with Lotus F1 Team next season. He has really made the most of his tremendous talent over the latter part of the 2013 season and will be a fantastic asset to our 2014 challenge.
"Romain will be joined by Pastor Maldonado. It is clear that Pastor has pace and potential - demonstrated by his 2010 GP2 Series title success and then through strong races throughout his career at Williams F1 Team - and we are convinced that we will be able to provide the correct environment to enable him to flourish regularly on track.
"With Romain and Pastor I believe Lotus F1 Team will be able to cause quite a few surprises next year."
Maldonado joins Lotus after three difficult years at Williams, where the obvious highlight was his surprise victory in the 2012 Spanish Grand Prix.
The 28-year-old, who is being replaced by Felipe Massa, earlier this month claimed he was "happy" to be leaving Williams, believing he had delivered more to them than they had done for him.
Now Maldonado has the chance to prove himself in a front-running team that finished fourth in this year's constructors' championship.
"It is a fantastic opportunity for me to join Lotus F1 Team for 2014," said Maldonado.
"It's no secret that I have wanted a change of scene to help push on with my Formula 1 career and Lotus F1 Team offered the very best opportunity for me to be competitive next season.
"The regulations and cars will change significantly so it is a very good time for a fresh start. I can't wait to be racing in black and gold."
As for Grosjean, the Frenchman has performed superbly over the second half of the season, finishing on the podium four times in five races prior to ending the campaign with an engine blow-out in Brazil on Sunday.
Grosjean said: "I am very happy to have official confirmation that I will be continuing to drive for Lotus F1 Team next season.
"This past year has been tremendously satisfying for me. We have worked well together, and I know everyone at Enstone is motivated to continue the fight for every last point available."