His promotion to the elite level comes after joining Rangers last November, where he played every minute of his 18 appearances and ranked third for the entire USL in total passes, while making 49 interceptions and winning 33 aerial duels.
Kansas City manager Peter Vermes said Musa had "progressed tremendously" with the Rangers and Kansas model of play.
"James is a very good decision-maker and reads the game well.
"He brings a lot of really good qualities to our team and we look forward to integrating him into the squad."
Musa was pleased to meet the goal behind his move from Saint Louis of breaking into the first team.
"I just want to thank Peter Vermes, Mike Jacobs and the entire organisation for giving me this opportunity to represent Kansas City and play for Sporting KC.
"I can't wait to get started and play in front of this amazing fan base."
Musa debuted yesterday morning, NZ time, in Kansas City's 1-0 away losss to the Seattle Sounders.