Young, 27, was inked to a deal worth $750,000 plus performance bonuses, MLB.com reported.
Young was named MVP of the 2012 American League Championship Series while playing with Detroit last season. He hit .267 with 18 home runs and 74 RBIs in the regular season for the Tigers.
"Delmon is an experienced major-league bat who will add some depth to our relatively inexperienced outfield and another layer of competition for playing time there as well," Phillies General Manager Ruben Amaro Jr. said.
Young was dogged by off-field controversy last season when he was arrested in New York and charged with second-degree aggravated harassment for allegedly hurling anti-Semitic slurs at four men while intoxicated.
The seven-year veteran has a career .284 batting average with 89 homers and 482 RBI while playing for Tampa Bay, Minnesota and the Tigers.
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