The 6ft half-back will make the step up to the Gallagher Premiership for the first time in his career, having enjoyed spells with the Knights and Bedford Blues in the Championship.
James has also represented Loughborough Students in National One and will join Alex Mitchell, Henry Taylor and Connor Tupai in competing for the No.9 shirt at Saints.
The black, green and gold were looking for a new scrum-half after reigning player of the year Cobus Reinach opted to accept a lucrative deal elsewhere.
The South African star will be exiting Saints this summer, having spent three seasons at Franklin's Gardens.
With big things expected of current young player of the year Mitchell, James will hope to show he can also compete for first-team appearances.
And the 26-year-old said: "The decision to take this opportunity with Northampton Saints and join a club at the very top level was a no-brainer for me.
“There’s a great set-up Franklin’s Gardens; the training facilities are excellent and the stadium is one of the best in the country.
“But most importantly, Saints are a club with huge ambition and a really impressive group of coaches, so I am confident it is the best place for me to improve as a rugby player.
“I’m really looking forward to working with Chris Boyd, Sam Vesty and the entire group having seen so many young players break through over the last 18 months.”
James' exploits for Loughborough saw him called up for England Students back in 2016, and since his arrival at Castle Park James has established himself as Doncaster’s first-choice scrum-half.
He finished the 2018/19 season as the Knights’ top-scorer and he has grabbed eight tries in 18 appearances this season.
Saints boss Chris Boyd has clearly been impressed and is now looking forward to seeing what James can offer at the Gardens.
“Tom has done really well over at Doncaster," Boyd said.
"He was spotted by some of our coaches working in that space, and also played alongside our academy coach Jake Sharp at Bedford.
"It was clear to us that he had really good core skills, works hard and comes from a good background.
“He just needs an opportunity to flourish and we think he’ll really compliment the guys we’ve already got for next year in Alex Mitchell, Henry Taylor and Connor Tupai.
"They’ve got their subtle differences but they are all young, high potential, and English, which fits our model perfectly.”