The 31-year-old, who toured with the Lions for the second time this summer, was confirmed as a Racing Metro player on the club's website.
"Racing Metro 92 is happy to announce the signing of Welsh international Mike Phillips," said an official statement.
"A highly-experienced scrum-half who has won 80 caps for Wales and a further 11 for the British and Irish Lions, Phillips has signed for a period of two and a half years.
"He will join the club from tomorrow, Tuesday, and will be available for selection for this Saturday's Heineken Cup fixture against Harlequins in Nantes."
And Phillips expressed his excitement at this new chapter of his career by taking to Twitter.
He said: "Great first day in Paris, can't wait to start with my new club RacingMetro92 tomorrow. Looking forward to the next 2.5 years!"