The team confirmed the agreement with Incognito but didn't reveal the length of the deal. Incognito announced on his Twitter account that the contract was for three years.
Published reports say the deal is worth more than $15 million.
Incognito, 32, started all 16 games at left guard for the Bills last season and played in his second Pro Bowl.
The productive season came after he missed the entire 2014 campaign, stemming from being disciplined for his part in the Miami Dolphins' bullying scandal involving former NFL offensive tackle Jonathan Martin.
Incognito was suspended for the final eight games of the 2013 season and was later released by the Dolphins.
Incognito, a third-round pick of the St. Louis Rams in 2005, also briefly played for the Bills in 2009.