Falcons general manager Thomas Dimitroff said the team is still working toward a long-term contract with Jarrett.
"As we have said since the end of the season, getting a deal done with Grady is our priority," Dimitroff told the team's official website. "Applying the franchise tag to him does not change that in any way. Our aim is for Grady to be an integral part of our plan for many years to come and this allows us to extend our negotiating window."
The tag prevents Jarrett from becoming a free agent when the NFL's new league year begins March 13. The Falcons have until July 15 to negotiate a long-term extension with the standout defensive lineman.
Jarrett will earn about $15.2 million if he signs and plays under the franchise tag in the 2019 season. He earned $1.97 million last year.
Atlanta selected Jarrett in the fifth round of the 2015 NFL Draft out of Clemson. He has started 46 of 61 games played with the Falcons. In four seasons, he has 179 tackles, 14 sacks and three forced fumbles.
The 25-year-old Jarrett had a career-high six sacks in the 2018 campaign.