It comes as Test legend Peter Siddle and Johan Botha join Cricket NSW as assistant coaches for Brad Haddin's first summer at the helm.
Murphy leaves the Sydney Sixers to sign a one-year deal with the Stars, who are likely playing their final season under that name given Cricket Victoria's privatisation plans.
Eventual runners-up the Sixers used Murphy in only two games last season, preferring breakout allrounder Joel Davies and BBL stalwart Ben Manenti as spin options.
Seven-time Test finger spinner Murphy joins Mitch Swepson as the leading spin options at the Stars for the 16th iteration of the BBL.
Glenn Maxwell, Marcus Stoinis and reigning player of the tournament Sam Harper are among the other big names on deck as the Stars continue their hunt for an elusive first title.
The Stars have seven more roster spots available ahead of the season that begins in December.
Elsewhere, Siddle will juggle his own BBL commitments at the Stars with bowling coach duties with Cricket NSW's Blues.
Fast-bowling great Siddle, who played 67 Tests, reunites with former Australian teammate Haddin in his first official coaching role.
Former South African international Botha joins the Blues as a spin-bowling consultant after resigning from his post as Queensland's head coach in June.
Botha quit with a year to run on his contract and was replaced by James Hopes, who had been due to become the Sixers' head coach before joining Queensland Cricket.
"Peter and Johan joining the Blues set-up shows that we're committed to having high-quality people around the team," said Haddin.
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