The 30-year-old failed to show up for training with the rest of the Cumbrians squad earlier this week fuelling speculation he was negotiating a move to Victoria Park.
Pools boss Ronnie Moore has now made the former Swindon, Leeds and Doncaster forward his seventh signing of the summer.
Moore is confident he can get his latest acquisition back to his best and made no secret of the fact he was in the market for a target man and experienced Paynter fits the bill.
“We’re pleased to get Billy in,” he told the club’s official website. “He’s got good experience and done well at lower league level so he’s exactly what we’ve been looking for really.
“He’s big, he’s strong, he holds the ball up well and will bring the midfield into the game and hopefully he can add a few goals for us as well.
“Things didn’t work out well for him at Carlisle but I know what that’s like as a striker – I went to Cardiff and played over 50 times and only scored six goals but then went to Rotherham and got 60 in three seasons.
“I am sure Billy can get back to scoring some goals and help us reach the targets we’ve set for the upcoming season.”