The move came one day after the Broncos signed Peyton Manning, an 11-time Pro Bowl selection released this month by the Indianapolis Colts, to a 5-year contract, apparently making Tebow expendable.
Denver will receive fourth- and sixth-round draft choices this season for Tebow and a seventh-round selection.
Mark Sanchez has started all 47 games he played for the Jets the last three seasons, suggesting Tebow would at best a second-team quarterback. New York lists three quarterbacks -- Greg McElroy and Drew Stanton in addition to Sanchez -- on its active roster.
Tebow became a sensation last season when he won the Broncos' starting position in the sixth week and led the team to a series of improbable come-from-behind victories. The team, 1-4 when he took over, finished 8-8 and qualified for the playoffs. They were beaten in the divisional playoffs by the New England Patriots.
Tebow is 167-of-353 passing for 2,383 yards and 17 touchdowns in 23 NFL games over the last two seasons. He also rushed for 887 yards and 12 touchdowns.
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