Marbury goes from one of the league's worst teams to one of the best and could make his debut later on Friday when the NBA champions host the Indiana Pacers.
"We are very excited to have a player of Stephon's caliber joining our team," president of basketball operations Danny Ainge told the team's website (www.nba.com/celtics).
"Our entire organization is confident in the belief Stephon can play an important role in helping us to win another championship."
Taken with the fourth overall pick in the 1996 draft by the Milwaukee Bucks, Marbury developed into one of the league's top guards as he averaged 19.7 points and 7.8 assists in a 13-year career that also included stints in New Jersey and Phoenix.
However, the 32-year-old battled with coaches during much of his five-year spell with the Knicks, his hometown club.
Marbury has not played in a regular-season game since January 2008 and in November was suspended for one game and fined $400,000 for refusing to play against the Detroit Pistons.
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