The 31-year-old defender had been training with QPR, following his release by Fulham, but he now heads to the Madejski Stadium on a short-term deal until January of 2014.
The Ulsterman, who spent six seasons at Fulham until July of this year, told the Reading website: "I had a great chat with manager Nigel Adkins, I like what he's trying to do with the club and I want to be part of it.
"He's been great to me so far and I look forward to working under him.
"It feels fantastic. I wasn't going to just jump into any silly offers but this was the right one for me.
"The training ground is perfect, I live locally and it's all good."
Baird's decision will come as a blow to Rangers boss Harry Redknapp who earlier this week lost Nedum Onuoha for around two months after the defender tore a hamstring against Brighton.