The Bills received three draft picks in the deal -- the 28th overall selection in 2009, a fourth-round selection in 2009 and an undisclosed pick in 2010.
The 6-foot-4 inch, 340-pound Peters went undrafted in 2004 after playing at Arkansas. He was angered by the Bills because he was unhappy about his contract, but with the Eagles, he will receive $60 million in six years -- $25 million guaranteed.
In Philadelphia, he joins former college teammate Shawn Andrews and replaces 1998 first-round pick Tra Thomas, who signed a free agent contract with Jacksonville last month.
At Arkansas, Andrews played left tackle, while Peters was a tight end.
"The bottom line is we have a group of good, young players here that we feel can come out and handle the great competition in the NFC East from a defensive line standpoint," Coach Andy Reid said.