The former Brazil captain has agreed to return to his homeland after a 12-year spell abroad and is expected to make a big impact on his new side.
The 34-year-old will be presented to the clubs' fans on Wednesday at Morumbi Stadium, as the former Brazil international looks to get a new chapter of his career underway.
"A player with this quality and profile will certainly further qualify our squad to compete in the major international competitions we will have next season," Sao Paulo vice president Joao Paulo de Jesus Lopes told the club's official website.
Much is expected of the former Inter defender, who comes with an international reputation and a resume of winning silverware with him. The former Brazil captain not only has a World Cup title to his name, but he also picked up 15 trophies in his 12-year stint in Europe, where he featured for Bayer Leverkusen, Bayern Munich, Inter and Juventus.
"Lucio is an old dream for Sao Paulo. We came very close to signing him in July, but in the end it wasn't possible," explained club director of football Adalberto Baptista. "Hopefully this time everything has gone well and he gets to add a lot of quality, experience and leadership to our squad."