Sundar, will arrive in the country and link up with his new team-mates at Emirates Old Trafford next month.
The all-rounder, who is currently following a period of rehabilitation with the BCCI after a recent injury, will be available for the whole Royal London One-Day Cup competition, and fitness depending, a number of LV=County Championship games in July.
The 22-year-old, who bowls off-spin, has already represented India in all three international formats and has also made more than 50 appearances in the Indian Premier League (IPL).
In 2017, at the age of just 18 years and 80 days, he became the youngest player to debut for India in T20Is and he has since made 31 appearances in the shortest format for his country – taking 25 wickets.
Sundar has also represented India four times in one-day Internationals and in four Test matches, most recently in the home Test series win against England in early 2021.
He plays domestic cricket in India for Tamil Nadu and has been compared to fellow spin bowling all-rounder, R Ashwin, who also progressed through the ranks in the Southern Indian state.
After representing India at the 2016 Under-19 World Cup, Sundar replaced Ashwin at Rising Pune Supergiant for the 2017 IPL, bowling at an impressive economy rate to help his side to the final.
In first-class cricket, Sundar has claimed 36 dismissals in 17 matches whilst also striking five fifties and a century with the bat.
Sundar said: “I am extremely excited to play county cricket for the first time with Lancashire Cricket.
“To play in English conditions will be a great experience for me and I can’t wait to play at Emirates Old Trafford.
“I would like to thank both Lancashire Cricket and the BCCI for allowing this opportunity happen .”
Lancashire’s director of cricket performance, Mark Chilton, added: “Washington is a multi-format all-rounder whose skills with both bat and ball will be a great addition for us in the Royal London Cup and County Championship this summer.”