Erwin, 22, moves back to the Scottish Premiership from English Championship outfit Leeds United.
The striker, who also spent loan at Oldham Athletic and Bury, scored five league goals in 2014-15 for 'Well.
"I'm delighted to get it over the line," Erwin told Kilmarnock's website. "It was Lee [McCulloch] who was pushing me to come here."
The striker is aiming for a top six finish and a good cup run this season, and believes he will benefit from his time playing in England.
"I was playing against a lot of good, experienced players," he added. "It's just been about gaining experience in different leagues and [getting used to] different ways of English teams playing."
The striker revealed he had spoken to Kilmarnock about a possible loan deal in January which failed to come to fruition.
"In the summer, I was speaking to him [McCulloch] and decided to come back up to Scotland."
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Kilmarnock have signed former Motherwell striker Lee Erwin on a two-year deal.