Several media reports said he got $30 million over four years with a $7 million signing bonus.
"We are extremely excited to announce the signing of Edgerrin James," said Coach Dennis Green at a news conference. "We feel that we have an offense that really needs that one thing, which is Edgerrin James, to make it really one of the very best in the entire National Football League."
The 6-foot, 214-pounder was the fourth overall pick in the 1999 NFL draft by Indianapolis and has played for the Colts his entire seven-year career.
James has gained 9,226 yards and scored 64 touchdowns. He also has 2,839 receiving yards on 356 receptions.