Financial terms of the deal, which include a team option for a fifth year, were not disclosed.
Pace was selected 18th overall, and was the first player from Wake Forest ever be chosen in the first round. In his final season at the school, the 6-4, 269-pounder had 73 tackles and eight sacks. He suffered a fractured fibula in the regular-season finale, but was able to return to play in the Seattle Bowl.
He finished his career second on the school's all-time record list with 29 sacks for minus 178 yards. His 54 stops for losses of 223 yards set a Wake Forest career-record.
Overall he recorded 189 tackles, 116 solos, with five forced fumbles and a fumble recovery while starting 33 of 42 games.
Penn State receiver Bryant Johnson, the 17th overall choice, remains unsigned.