The 29-year-old American international, who is coming off hip surgery and who was released by the New York Red Bulls after the 2013 campaign, has agreed to a contact with the Impact. The length of the deal and his salary were not disclosed.
Coach Frank Klopas said this week that if Pearce can regain full fitness, his signing "could end up being a steal."
Pearce has played 106 MLS games over the last five seasons, including 100 starts. He has two goals and 12 assists. He also played two seasons each in Germany and Denmark and has been selected 35 times to the U.S. national team.
"He's played in the league and in Europe and he brings a lot of experience," said assistant coach Mauro Biello. "It's someone that understands. He brings leadership. These are all important qualities he can bring to the team."
When he is ready to play full games, he will give Klopas options on the back line. Pearce mainly plays left back, a position held last season by Jeb Brovsky, but can also play in the middle and Brovsky can also play on the right side.
The Impact open the season Saturday in Dallas and will stay in Texas to play at Houston the following week before returning for their home opener March 22 at Olympic Stadium.
"Having played over 100 games in this league, his experience and soccer savvy will bring a lot to the team," sporting director Nick De Santis said in a statement. "He is a natural left back, who will give us more depth on defence and who can contribute to the offence as well.
"Heath is highly motivated to get back to the level that saw him on the national team at one point in his career."
Pearce became the top signing by the Impact, who made few off-season moves after finishing fifth in the Eastern Conference in 2013.
He joined the Impact during training camp in Orlando, Fla. He played parts of two pre-season games and said he is getting close to match fit.
The Modesto, Calif. native underwent surgery to repair a torn labrum in his hip in July. The injury had been nagging at him for a couple of seasons before he went to get it fixed.
He said he had offers from other MLS clubs, but chose Montreal because he liked Klopas' coaching style and felt the Impact were a "multicultured team with a ton of experience."
Pearce, a three-time MLS all-star, joined FC Dallas in 2009 and later played for Chivas USA before joining the Red Bulls in 2012.
He was a fixture on the U.S. team earlier in his career, especially at the 2009 Confederations Cup and the 2009 Gold Cup, but has been overlooked in recent years.