Watson is currently sidelined with a knee injury which has kept him out of action since May's US PGA Championship, but will attend the next event in Boston in September as an "off-course captain".
The left-hander is not expected to play until next season, when the Saudi-backed breakaway expands to a 14-event LIV Golf League.
Watson won the Masters in 2012 and 2014 and reached a career-high of second in the world in February 2015, but has not tasted victory since winning three times in 2018 and is currently 86th in the rankings.
"Bubba Watson is a tremendous addition to LIV Golf - another major champion joining the growing list of stars on our teams," LIV Golf CEO Greg Norman said.
"His game combines the power, innovation and excitement that the LIV Golf brand represents.
"He's a risk-taker who has cemented his name among the world's very best and we're eager for him to come aboard to bring new energy and audiences to this league."