The team optioned reliever Justin Berg to Triple-A Iowa in a corresponding move.
Howry, who's previously pitched for the Cubs and Chicago White Sox, was released by the Arizona Diamondbacks last weekend. The 36-year-old veteran mostly likely will be used in the sixth and seventh innings by manager Lou Piniella.
The Cubs will pay a pro-rated rate of the major-league minimum of $410,000.
The right-hander signed a one-year deal with the Diamondbacks in the offseason, but fell out of favor when he allowed 17 runs in 14 1/3 innings.
Howry had a 3.39 ERA in 63 appearances for the Giants last season.
Berg had a 6.43 ERA in 14 appearances this season. To make room on the 40-man roster, right-hander David Patton was designated for assignment.
This will not preclude the Cubs from seeking an eighth-inning set-up man via trade.
Bruce Levine covers baseball for ESPNChicago.com. Information from The Associated Press was used in this report.