Cassell was waived by the Los Angeles Clippers on Thursday amid rumours he was set to sign with the Celtics if he cleared waivers.
Cassell had been petitioning the lowly Clippers for a trade or a contract buyout in recent weeks.
His agent David Falk told the Boston Globe on Monday the 38-year-old signed a contract shortly after clearing waivers on Monday evening, with the Celtics later confirming the acquisition.
Cassell's first appearance with the team is expected to be at Wednesday morning's shootaround, while it is unknown if he will play against the Detroit Pistons on Wednesday because of a sore wrist.
A 15-year veteran, won two championship rings with the Houston Rockets in 1994 and 1995, will join a pair of former team-mates in Kevin Garnett and Ray Allen.
Cassell is averaging 12.8 points, 2.8 rebounds and 4.7 assists per game in only 38 contests, but he has been sidelined since February 20 with a wrist injury and also missed 12 contests earlier this season with a strained left calf.
A 1993 first-round draft selection, Cassell averages 15.9 points and 6.1 assists in 976 career games with seven different teams.
In a corresponding move, Boston re-assigned guard Gabe Pruitt - their second-round pick in last June's draft - to the Utah Flash of the D-League.
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