The team also announced it had waived guard Jameer Nelson.
Jefferson, 37, cleared waivers Monday after being waived by the Hawks after Atlanta acquired him in a trade with the Cleveland Cavaliers that was completed Saturday.
ESPN previously reported Jefferson will make $2.3 million in the one-year deal.
Jefferson is joining his seventh NBA team after debuting in the 2001-02 season and spending his first seven seasons with the then-New Jersey Nets. He made the NBA's All-Rookie Second Team in 2002.
He spent the last two years with the Cavaliers, serving as a role player and helping the franchise win its first championship during the 2015-16 season.
The 16-year NBA veteran has averaged 12.8 points, 4.1 rebounds and 2.1 assists in 1,161 career games.
Nelson, 35, spent the past two-plus seasons with Denver, averaging 8.9 points and 4.7 assists over 148 games.