Lehmann was the coach of the Hyderabad-based Deccan Chargers which was terminated by the BCCI for breach of contract last season.
The new Hyderabad franchise, the Sunrisers, did not offer Lehmann a new coaching contract and appointed former Australian all-rounder Tom Moody in his place.
"We are extremely happy to have Darren Lehmann on-board as the coach of our team. Darren brings with him rich experience and immense knowledge about the game and the T20 format through his stints with IPL and other leagues," promoters of Kings XI Punjab said in a statement.
"We firmly believe that he will be a great mentor to our team and will take us to new heights. We wish him all the best for his endeavours," it added.
Lehmann said he is "honoured" to get a chance to coach Kings XI Punjab in this year's IPL.
"I am extremely honoured. The franchise has always excited me and I look forward to working with the owners, players, support staff and fans. I'm geared up for the challenges it brings and will always encourage our team to be an entertaining and aggressive brand that people love to watch and associate with.
"I'm also looking forward to working with Adam Gilchrist again and help all the players grow on and off the field. I would once again like to thank the owners for giving me this opportunity," said Lehmann.
