The Brewers will pay Lohse $4 million in 2013 and $11 million in 2014 and 2015. The other $7 million of Lohse's contract from 2013 will be paid out over 2016, 2017 and 2018.
Lohse, 34, went 16-3 with a 2.86 ERA in 33 starts and 211 innings for St. Louis in 2012.
"Kyle is coming off two very good years, and his experience and competitiveness will be welcomed by the club," Brewers general manager Doug Melvin said. "This signing makes us a better club today than we were yesterday."
The veteran right-hander will throw a bullpen session Tuesday and hopes to pitch in an exhibition game on Thursday. Though he didn't go through spring training with the Brewers, Lohse kept himself in shape by going through workouts and pitching to college players in Arizona.
He says his arm is stretched to 90 pitches and expects to be ready for the season that begins on April 1. Lohse signed with St. Louis in mid-March of 2008 and ended up starting on Opening Day.
"I know physically I'm able to do it," Lohse said. "It's just a matter of getting out there and showing them where I'm at and getting their confidence up to know where I'm at.
"Physically I feel right where I need to be strength wise and pitching wise. I think I will be able to do it and we talked about throwing in a game on Thursday. We'll see how that works out and kind of go from there. I feel confident that pitching wise I know where I need to be."
Despite finishing seventh in the National League Cy Young voting last season, Lohse remained unsigned largely due to the price tag placed on him by agent Scott Boras and the draft pick compensation required to sign him.
The Brewers will give up the No. 17 pick in the first round of this year's draft and the slot money that goes along with the pick. Under the previous collective bargaining agreement, teams only had to give up the draft pick. With a budget to sign all draft picks now in place, teams can't just put the money saved toward another pick, but have to give up the money slotted for the first round pick.
"We had a grand impediment," Boras said. "We had a great pitcher following a great year, with great demand for his services, but the types of teams that wanted Kyle were playoff caliber teams. Those teams wanted to see if they could add a talent like Kyle, which most can't, yet not give up 25 to 30 percent of their draft dollars."
In this situation, it hurt Lohse. Boras had five or six teams inquire about Lohse's services in November, but all balked at the idea of giving up the slot money.
"Organizations having to choose between helping their team and having to give away draft dollars, which obviously hurts the development of the team, that system creates a circumstance that no general manager should have to face," Boras said. "In the old system, giving away your draft pick was not a problem. You still had the dollars for your scouting staff to utilize.
"I'm sure it was a very difficult decision for the organization, but also bringing in this type of player makes them immediately competitive."
Melvin was hesitant to part with the draft pick, but in the end deemed it was a price he was willing to pay to add a pitcher of Lohse's caliber to the rotation.
"Losing the first-round pick is tough," Melvin said. "That's a decision we have to make. I have a lot of confidence in our scouting staff of going out there and finding other Major League players. We have a lot of good players on this ballclub who weren't first-round picks."
Lohse figures to slide into the No. 2 spot in Milwaukee's rotation behind Yovani Gallardo. The Brewers first opted to go with young and inexperienced arms behind Gallardo and Marco Estrada, but rough springs by
Wily Peralta, Mark Rogers and Mike Fiers may have tempted them to pull the trigger on an established arm.
"We still like our young pitching," Melvin said. "This didn't have to do with panicking or anything like that. Our pitching has been pretty good down here. This didn't have anything to do with our young pitchers. This is the opportunity to add somebody (who) had an outstanding year last year."
Lohse's career took off when he joined the Cardinals prior to the 2008 season. In five years with St. Louis, Lohse has gone 55-35 with a 3.90 ERA in 156 starts.
The right-hander made his big league debut with Minnesota in 2001 and spent almost six years in the Twins rotation before being traded to Cincinnati during the 2006 season. Lohse spent one full season with the Reds and one with Philadelphia before signing with the Cardinals.
He targeted the Brewers from the beginning, knowing they were in the same division he's found great success in and were in the unique situation of having the offense to contend but needing a pitcher to possibly get over the hump.
"It gives me a lot of confidence knowing how I've done in that division the last several years. I know the parks, I know the hitters," Lohse said. "That gives me a lot of confidence that I can go in and do my job."
For now, Lohse is just happy and relieved that the long process of waiting is finally over.
"Anybody would be lying if they told you they weren't at this point," Lohse said of his relief. "You get a lot of questions, everybody is concerned. It's kind of nice to not have to answer those questions anymore. I always knew something was going to work out. I didn't know it was going to be this late, but I'm glad the way it's worked out. It's a great situation and a great team to be on."
Interviews for this story provided by the Milwaukee Brewers.