Karthik also represented Delhi Daredevils in the first three editions.
Dinesh Karthik will join the Mumbai Indians from the Kings XI Punjab as the first transfer of the 2012 IPL trading window. The wicket-keeper batsman played 14 matches for the Mohali-based side last season without much success.
Karthik, who has played for India in both Tests and ODIs, also represented Delhi Daredevils in the first three editions of the T20 league and featured in 42 matches in all.
Nita Ambani, owner of the Mumbai Indians franchise, expressed her joy at the signing.
"We are very pleased to add a player of Dinesh Karthik's calibre and specific skills to the Mumbai Indians squad as this addition will further strengthen our side," she said.
The owners of Kings XI Punjab also wished him good luck.
"Dinesh played an important role for Kings XI Punjab last season, but with our captain Adam Gilchrist donning the wicket-keeping gloves, we were unable to harness Dinesh's complete potential. Everybody at Kings XI Punjab wishes him the very best in his future endeavours," a statement from the owners said.
Meanwhile, IPL chairman Rajiv Shulka expects more happenings in the trading window in the coming days.
"It looks like the 2012 trading window will be an active one as the franchises look to revise and strengthen their squads in advance of the player auction on 4 February 2012," he said.