Modano, 40, was the first overall selection of the 1988 NHL entry draft and spent his entire career with the Minnesota North Stars and, after franchise relocation, the Dallas Stars.
However, the Stars didn't offer the center a contract after last season, in which Modano had 14 goals and 16 assists, setting up the move to Detroit.
Terms of the agreement were not released but the Detroit Free Press reported it was worth $1.25 million.
Modano has played 1,459 regular-season NHL games, scoring 557 goals and amassing 802 assists. He was a member of the Dallas team that won the Stanley Cup in 1999.