The former Germany international has struggled to make an impact at Old Trafford after arriving from Bayern Munich, and is looking forward to a fresh challenge in the United States.
The midfielder has been frozen out by Jose Mourinho this season, making just four appearances in all competitions, but none in the Premier League.
Schweinsteiger is excited by the prospect of playing in Chicago, with reports also claiming the deal will net him a bumper $4.5million in 2017.
"Throughout my career, I've always sought opportunities where I hoped to make a positive impact and to help make something great," Schweinsteiger said in a statement.
"My move to Chicago Fire is no different. Through my conversations with [general manager Nelson Rodriguez] and Pauno, I'm convinced by the club’s vision and philosophy and I want to help them with this project."