Reports say he will get $60 million and a $12 million signing bonus.
"(Shortstop has) been a cornerstone of the Orioles franchise," said co-general manager Mike Flanagan. "It's always been an integral part of the overall Orioles philosophy, and we're certainly happy to be adding a bat to the middle of the lineup."
Others who have played the position include Cal Ripken Jr. and Mike Bordick.
Tejada was among the premier free agents available and the target of a number of teams looking for a potent bat in the middle of their lineup. The 2002 American League MVP had been a key component of the Oakland Athletics, who have reached the playoffs in each of the last four seasons.
Tejada, 27, is coming off a season in which he hit .278 with 42 doubles, 27 homers and 106 RBI in all 162 games.