The deal, which experts estimate to be worth about £1.5m a year, marks the first time the British food retailer has sponsored a major football club.
As part of the sponsorship agreement Waitrose's name will appear on the Reading's home and away kits. A selection of the grocer's food will also be sold in the club's stadium.
Waitrose replaces Korean electronics brand Kyocera as the shirt sponsor.
Reading was relegated from the Barclay's Premiership in May, following two years in the top flight.