Gambhir, 31, will replace Hamish Rutherford as Essex's overseas player and he is expected to make his county debut in the LV= County Championship match against Northamptonshire, starting on August 20.
Rutherford will return to New Zealand after Saturday's Friends Life t20 finals day ahead of their domestic and international competitions.
Gambhir, who has scored 4,021 Test runs at an average of 44.18, said: "I am delighted to have this chance to make my county cricket debut with Essex.
"After the IPL ended I was looking to play some competitive cricket and playing for Essex will give me that opportunity.
"I am thankful to Essex for presenting me with this option and BCCI (Board of Control for Cricket in India) for allowing me to participate in county cricket.
"I hope I can make some meaningful contributions to Essex in the ongoing season."