Current announced Tuesday that Olbermann will host a nightly prime-time news and commentary show. His program will begin later this year.
The network said Olbermann will also serve as chief news officer and have an equity stake in Current Media.
The outspoken Olbermann had been at MSNBC since 2003, where his nightly "Countdown" was the top-rated program and helped mold that network as a left-leaning alternative to Fox News Channel. But his relationship with network bosses was stormy.
Current, co-founded in 2005 by former Vice President Al Gore, is now revamping its little-seen schedule. The addition of Olbermann could raise its profile among viewers.
Current TV is owned by Current Media.