The Brazilian has been employed as the team's test driver this season and made his Formula One debut when his new team-mate was too ill to race.
In Irvine's absence Burti finished 11th at the Austrian Grand Prix.
The 25-year-old Brazilian replaces Johnny Herbert who is leaving F1 to race in the US next season.
"Since I began my career in karting when I was 16, I have worked towards one day driving in Formula One," said Burti.
Burti finished third on the Formula Vauxhall circuit in 1996, before joining the Paul Stewart team in British Formula Three, finishing second in the 1999 championship.
"Luciano is one of the most promising young drivers around and I am very confident that alongside Eddie Irvine, they will form a solid team," said Jaguar boss Neil Ressler.
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