"We are delighted that Jared chose to join the Raptors," said Raptors President and General Manager Masai Ujiri. "He provides us with another experienced front court player that can rebound and score."
Sullinger, 6-foot-9, 260 pounds, averaged 10.3 points, a career-high 8.3 rebounds and 23.6 minutes in a career-best 81 games with Boston last season.
Sullinger started 73 games last season for the Celtics. He averaged 10.3 points and a team-high 8.3 rebounds per game while averaging just 23.6 minutes per game.
The Celtics added Atlanta center Al Horford and rescinded Sullinger's $4.4 million contract to clear up salary space.
Sullinger has had to deal with a balky back in his career, which has limited his time on the court.
The Raptors were in the market for another frontcourt player after watching Bismack Biyombo leave Toronto for Orlando in free agency.
Sullinger earned $2.3 million last season.