Kitchee posted a picture on Instagram with the club's badge and the slogan "Welcome Forlan", with the move also being widely reported by Uruguayan media.
Now 38, the ex-Manchester United and Atletico Madrid star left Europe in 2012, having spells in Brazil and Japan before a stint at Penarol in his home country and most recently with Mumbai City in India in 2016.
He has not played since then, but Kitchee will hope the 112-times capped Forlan can help them as they prepare to play in this year's AFC Champions League.