Monroe, 30, is expected to join the Cubs on Friday in Arizona.
"He's a good athlete, a good outfielder and he's got some pop," Cubs manager Lou Piniella said in announcing the move. "He's a good bat coming off the bench with experience. The teams we're playing here all have left-hand starters in the rotation. He'll be a valuable addition to us, and he gives us more experience."
This season, Monroe was batting .302 with five homers, eight doubles and a .542 slugging percentage against left-handed pitchers. He has played all three outfield positions.
Cubs bench coach Alan Trammell knows Monroe well from their days together in Detroit.
"To me, he's an above-average outfielder," Trammell said. "He can play all three positions. He's had some pretty productive years. I haven't talked to anybody over there as to how this came about."
A career .258 hitter who was batting .222 in 99 games this season with the Tigers, Monroe had been designated for assignment.
"As far as what type of person he is, he's a great guy and will fit in very well," Trammell said. "He'll be a nice fit. He's produced at the Major League level."
Cubs general manager Jim Hendry said he has been looking for a more experienced right-handed bat to deal with lefties.
"Our young players have played terrific, but I think going into September it would be nice to get a guy who's done it before and had a world class second half last year," Hendry said of Monroe, who hit five homers and had nine RBIs in the playoffs last season with the Tigers.
"He's 30 years old, so he has a lot left in the tank," Hendry said. "Our scouts feel he could add something to the table, especially against lefties."
The Cubs are batting .253 against left-handers this year compared to .273 against right-handers. They had Matt Murton and Jake Fox as right-handed options off the bench against southpaws, but Murton has shown more power against right-handers, and all four of his homers have come off them.
Tigers manager Jim Leyland complimented Monroe.
"He was certainly one of our big guys last year," Leyland said. "I'm very happy for him. He'll be in the thick of a pennant race. He's going to be playing in a good ballpark for him."
If the Tigers liked Monroe, why was he designated for assignment?
"It was just a situation where we felt here that, this year, it wasn't going to get better, and you have to start making decisions on what you want to do with people in the future," Leyland said. "That's basically why that was handled that way."
To make room on the 40-man roster, the Cubs designated Buck Coats for assignment.
Carrie Muskat is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.