Punk, whose real name is Phil Brooks, announced the deal along with UFC president Dana White during UFC 181 on Saturday.
"This is my new career—100 percent," Punk said during the event. "I'm going to go full steam ahead, all systems go."
There is no firm date for Punk’s first bout, though UFC president Dana White said it’ll likely happen sometime in 2015.
Brock Lesnar made a similar transition from wrestling to mixed martial arts, and became one of the most divisive fighters in the sport during his tenure in the octagon.
"He wanted to fight here," White told ESPN. "He wanted to give it a shot, so we gave him an opportunity.
“It's not like Brock Lesnar. We're not going to throw the kitchen sink at him. Lesnar had a wrestling background. [CM Punk] is going to fight a guy who is 1-0, 1-1, 2-1 – something like that."
This is probably a good idea. At 36, Punk has no experience in MMA.