The Canadian will step up from the Indy Lights series, where he finished sixth in his debut season this year.
It also confirms the departure of James Hinchcliffe, who made his full-time return to the IndyCar Series this year with Andretti Steinbrenner Autosport, and means there is officially no room for Kyle Kirkwood.
The latter won 10 of 20 races en route to clinching the 2021 Indy Lights title for Andretti Autosport, but will have to try the open market for a full-time promotion next year.
The signing of 21-year-old DeFrancesco comes off the back of a test at the Indianapolis Motor Speedway road course.
“I am incredibly grateful to Michael Andretti and George Steinbrenner IV for the belief they have shown in me over the past two seasons moving up the Road to Indy ladder,” he said.
“To now take that final step into IndyCar with two of the world's biggest names in sports – Andretti and Steinbrenner – is an incredible opportunity that I can't wait to take full advantage of.
“I have three very experienced teammates to learn from and that is what makes this opportunity even more exciting.
“To get to race in the IndyCar Series with Andretti Steinbrenner Autosport and to contest the Indianapolis 500 is a dream come true and I'm so looking forward to getting started.”
DeFrancesco joined the Andretti fold in 2020, contesting Indy Pro 2000.
He claimed second that year to Sting Ray Robb with two wins and six podiums.
“We're thrilled to keep Devlin in the Andretti Autosport family as he makes his final jump up the Road to Indy ladder into IndyCar,” said Andretti Autosport boss Michael Andretti.
“Devlin has been a great addition to our Indy Lights programme and has showed a lot of growth and strength at the recent test days.
“I think he'll continue to grow with IndyCar and I'm really glad that we could again partner with George and the Steinbrenner Racing team for the #29.”
The 2022 IndyCar Series gets underway on the streets of St. Petersburg on February 27 (local time).