The deal includes $3 million guaranteed, with $3 million in incentives.
The addition of Wolfe comes one day after the Ravens were unable to finalize a deal with Michael Brockers. There was an issue with Brockers' injured ankle, and the sides couldn't agree on a revised deal, a source said.
Baltimore has made it a priority to reshape its defensive front. The Ravens acquired defensive end Calais Campbell from the Jacksonville Jaguars, traded defensive end Chris Wormley to the Pittsburgh Steelers and watched defensive tackle Michael Pierce sign with the Minnesota Vikings in free agency.
Wolfe should help improve the pass rush for the Ravens. Baltimore's defensive linemen totaled four sacks in 2019, the fewest by any team.
Wolfe finished his eighth season with the Broncos in 2019 and was one of the longest-tenured players on the team's defense; only cornerback Chris Harris Jr. and linebacker Von Miller had played on the defense longer. Harris recently agreed to a deal with the Los Angeles Chargers, leaving Miller as the only defensive starter from Super Bowl 50 still with the Broncos.
Coach Vic Fangio's defensive scheme turned out to be perfect for Wolfe, as he had one of his best all-around years in 2019, with 34 tackles and a career-best seven sacks. Wolfe has 33 sacks in his career.
Wolfe's high-motor play has been a key part of the defensive front, and Miller credits Wolfe for many of his sacks "because of what Wolfe does next to me. He's a beast.''
That intensity has come at a physical price at times, as Wolfe has battled through some injuries throughout his career, including neck surgery. He has played 16 games three times and went to injured reserve this past season after 12 games with a dislocated left elbow.
Wolfe, who turned 30 in February, was a second-round pick by the Broncos in 2012 -- the team had traded out of the first round that year -- and he immediately started 16 games as a rookie for a team that won the AFC West. He started every game he played in for the Broncos, 108 in all.
ESPN's Jamison Hensley and Jeff Legwold contributed to this report.