The dasher from Canterbury had retired from all forms of international cricket in 2016 but continued to ply his trade in various T20 leagues across the globe.
The former Black Caps skipper has played 101 Test matches for New Zealand and scored 6453 runs with a high score of 302. He featured in 260 ODIs and amassed 6083 runs with a strike rate of 96.37.
KKR had announced that they were parting ways with Jacques Kallis, their head coach, and Katich.
McCullum's association with KKR goes back to the maiden season when he set the stage on fire with a blistering 158-run unbeaten knock in the first-ever match of IPL.
He was an integral part of the KKR squad for five seasons and also led them in the 2009 edition.
The right-hand batsman had hinted at trying his hand at coaching in his retirement statement. “The next chapter, in both media and coaching, will challenge me further,” he said.