Terms of the contract weren't revealed, but ESPN reported it was worth $23.5 million with a club option for 2016.
Known as a dependable arm, the right-hander has logged at least 30 starts in each of the past 10 seasons, racking up 199 innings or more in nine of those seasons.
Arroyo compiled a 14-12 record with a 3.79 ERA over 32 starts for Cincinnati last season -- his eighth with the Reds.
Over 391 career appearances (355 starts) with the Pittsburgh Pirates, Boston Red Sox and Reds, Arroyo has a 138-127 record, 4.19 ERA and 1,479 strikeouts in 2,278 2/3 innings.
Swim Week Miami Beach 2014 [PHOTOS]