Hatton, the world number 16, will join Rahm's Legion XIII team and debut at the LIV event in Mayakoba, Mexico this week.
"I'm really excited for this next chapter, to link up with Jon Rahm and Legion XIII and to get started this week in Mexico," Hatton said.
Only earlier this month, Hatton had claimed he was "quite happy playing the PGA Tour and DP World Tour."
According to media reports, the 32-year-old will earn $60 million for making the move to LIV.
Hatton was won six times on the DP World Tour and once on the PGA Tour at the 2020 Arnold Palmer Invitational, but has not lifted an individual title for three years.
The news is another blow to golf's traditional tours after LIV poached world number three Rahm in a deal reportedly worth hundreds of millions of dollars in December.
A proposed merger between the PGA Tour and the Saudi Public Investment Fund, which backs LIV, appears to have stalled after the deadline set to agree a framework for the joint venture passed on December 31.
