The 31-year-old left-arm spinner has apologised for letting down Sussex and vowed to earn England selection again, having been fined by police for urinating on bouncers after he was thrown out of the club on August 5.
Sussex confirmed yesterday that Panesar has played his last match for them.
He has now agreed to join Essex on loan until the end of the season.
Panesar said: “I apologise for letting the club, my colleagues and my fans down.
“I am determined to do whatever it takes to gain selection for England this winter. I want to become the best I can be.”
Panesar was overlooked for Wednesday’s fifth Ashes Test at the Oval.