Crutchlow, 35, will leave LCR Honda at the end of the season after he was dropped from their lineup in favour of Alex Marquez.
The three-time MotoGP race winner was also linked with a move to Aprilia but has decided to join Yamaha, replacing three-times MotoGP champion Jorge Lorenzo in the testing role.
Crutchlow has also confirmed his availability for selection next season as a replacement rider in case one of Yamaha's MotoGP riders are forced to miss a race through illness or injury.
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After impressing in the Superbike world championship, Crutchlow started his MotoGP career with Yamaha's Tech3 outfit in 2011 before moving to Ducati in 2014.
Starting from the MotoGP shakedown test scheduled in Sepang, Malaysia from February 14-16, Crutchlow will ride Yamaha's YZR-M1.
"This wealth of experience, coupled with Cal's honest no-nonsense approach, will surely benefit us greatly as we strive to improve our YZR-M1 bikes with a full testing programme next year," Yamaha Motor Racing managing director Lin Jarvis said in a statement.
Italian MotoGP great Valentino Rossi will swap seats with Petronas Yamaha's Fabio Quartararo, who is taking his place at the factory Yamaha team alongside Spaniard Maverick Vinales next season. (Reporting by Hardik Vyas in Bengaluru Editing by Toby Davis)
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