The 26-year-old was a free agent after coming to the end of his contract with the Pittsburgh Steelers, where he had played the last four seasons.
General manager Jeff Ireland said in a statement: "We are pleased to reach an agreement with Mike Wallace.
"He has a unique skill set which we believe will be a welcomed addition to our offense. We are looking forward to his contributions to the team."
In a message to NFL.com, Wallace wrote: "Just ready to start this next chapter in my life. It's an exciting time."
The contract is understood to be worth $60m (£40.01m) over five seasons.