The 27-year-old, who will become the Premiership's highest-paid player, will join the Coventry-based club at the conclusion of the New South Wales Waratahs' 2016 Super Rugby season.
Beale helped the Wallabies to the World Cup final last autumn, and was a Super Rugby winner at club level in 2014.
"I want to win trophies with Wasps in the Premiership and Europe," he said.
Australia's relaxing of international selection rules for overseas-based players means the Sydney-born back, who has played for his country across the three-quarter line, can continue to feature for the Wallabies.
"It's a privilege every time you get to pull on that Test jersey and if I'm lucky enough to be selected for Australia in the future, I'll be ready," he added.
Beale's arrival will counterbalance the loss of New Zealand international back Charles Piutau to Ulster for next season, when his short-term deal comes to an end this summer.
"It was important for us to recruit another world-class player to replace him, which we've achieved by signing Kurtley," said director of rugby Dai Young.
"He's played at the highest level, which should help our squad's continual improvement moving forward.
"There are very few players in world rugby who can really excite people and get spectators on the edge of their seats. Kurtley Beale is one of those rare talents. Every time he gets the ball in his hands, you can sense the anticipation among those watching that something is going to happen."
Wasps have signed Australia international full-back Kurtley Beale for the 2016-17 Premiership season.