South Africa international Carr spent three months at the Ricoh Arena earlier this season providing injury cover and he made a big impact during his short time in Coventry.
The 27-year-old impressed in both the Aviva Premiership and European Champions Cup, scoring four tries from 11 appearances, before heading back to Super Rugby side Stormers for the remainder of the campaign.
Wasps have now managed to secure his signature for the entire 2018-19 season and Young is delighted that such an influential player will be turning out for the club again.
"Nizaam made a massive impact during the time he was with us in the autumn," he told the club's official website. "As a powerful ball-carrier with plenty of pace he proved to be a really good fit with our playing style.
"His close-quarter work also really stood out in a couple of games played in bad weather. He also immediately became very popular with the rest of the players and the fans while the staff and coaches found him excellent to work with.
"We are therefore really delighted that he is rejoining us on a permanent basis and look forward to seeing him become part of a very strong back-row group."