Cloutier played in only 13 games with the Canucks, recording an 8-3-1 record with a 3.17 goals-against average, before sustaining a season-ending knee injury in a game at Anaheim on Nov. 20.
Before that, he was the first goalie in franchise history to post three straight 30-win seasons.
"I think it's important to have an established goaltender," Kings general manager Dean Lombardi said. "I think some of his best hockey's ahead of him. This kid's a competitor."
The Canucks will receive a second-round draft choice next year and a conditional selection in the 2009 draft depending on whether the Kings can re-sign Cloutier, who is under contract for next season at $2.5 million. He can become an unrestricted free agent after that.
Cloutier received medical clearance to resume practicing with Vancouver late in the regular season and could have played in the playoffs, but the Canucks lost six of their last eight games to miss out by three points.
"It's good timing for a change of scenery," Cloutier said during a conference call. "I didn't actually know where I was headed, but when I heard it was Los Angeles it was a good sign for me and I'm very happy."
Cloutier became expendable when Vancouver acquired goaltender Roberto Luongo from Florida last month and signed him to a four-year, $27 million contract.
"I think Dan's a top-15 goaltender in the league, and when he's on top of his game, he's better than that," Canucks general manager Dave Nonis said.
Cloutier began his NHL career with the New York Rangers in 1997 and played for Tampa Bay before being acquired by the Canucks during the 2000-01 season. He had his best season in the 2003-04 season with the Canucks, going 33-21-6 with a 2.27 GAA in 60 games.
He was 31-22-5 with a 2.43 GAA in 62 games in the 2001-02 season and 33-16-7 with a 2.42 GAA in 57 games in the 2002-03 season.
Cloutier should give the Kings a boost in goal over Mathieu Garon, who went 31-26-3 this season in 63 games. He has the added benefit of playing for coach Marc Crawford, who he knows from his days in Vancouver.
Crawford was fired by the Canucks in April and hired by the Kings in May.
"This is solidifying the goaltending position here in Los Angeles," Crawford said. "Dan is a great competitor. He's worked extremely hard at his game.
"You need a real good technical base and you need the passion that Dan exhibits so well in his game. We're pleased to have him in the fold here in Los Angeles," he said.