Short, 24, who is currently on loan at London Wasps, played against the Exiles in the recent Aviva Premiership fixture at Adams Park.
His strong running and strength in the tackle made him one of the breakthrough players in the Aviva Premiership during the 2010/11 campaign.
He has scored 12 tries in 54 Premiership appearances since making his debut in November 2010.
The 24 year-old scored the only try in the 2011 Premiership final for Saracens in their victory over Leicester at Twickenham.
Irish director of rugby Brian Smith said: “James has a huge amount of Premiership experience for a 24-year-old. He is extremely talented, a great finisher and an ambitious player who will be a huge asset to our squad.”
Commenting on his decision to sign for the Exiles, James said: “I have thoroughly enjoyed my time at Saracens and winning the Premiership in 2011 was a real highlight.
"However, I feel it is time for a new challenge and the chance to join London Irish is a perfect opportunity for me.
“They play a brand of rugby that will really suit my game and with players like Tom Court, Luke Narraway and Tom Guest also joining this summer, the intent of the Club looks very ambitious.”
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