Terms of the contract weren't revealed, but sports broadcaster MASN reported the deal is worth $48 million.
The Orioles will have to surrender a first-round draft pick to the Cleveland Indians, who had put in a qualifying offer for the 30-year-old right-hander.
Jimenez, an eight-year MLB veteran, posted a comeback season in 2013, going 13-9 with a 3.30 ERA over 32 starts with the Indians. He struck out 194 batters over 182 2/3 innings.
After a breakout season in season in 2010 when he compiled a 19-8 record with the Colorado Rockies, Jimenez struggled the next two years, going a combined 19-30 with a 5.03 ERA.
The Dominican Republic native sports a career 82-75 mark with a 3.92 ERA.
His signing came just days after the Orioles announced they inked South Korean right-hander Suk-Min Yoon to a three-year contract.