The defensive end agreed to a three-year deal worth up to $30 million, his agent, Carl Carey, told ESPN's Josina Anderson. The deal includes $7.5 million in guaranteed money and will pay Peppers $8.5 million in salary for the first year, Carey told Anderson.
Peppers was released Tuesday by the Chicago Bears but found work four days later with the division-rival Packers.
In Green Bay, Peppers will be reunited with one of his former coaches, Mike Trgovac, who is the Packers' defensive line coach.
Trgovac coached Peppers from 2002-08 with the Carolina Panthers. He was Peppers' position coach in 2002 and was Carolina's defensive coordinator from 2003-08.
Carey took to Twitter on Saturday morning, announcing that Peppers "is officially a Packer!"
Carey also tweeted a photo of his client standing in Lambeau Field.
With Peppers set to receive a base salary of $13.9 million in 2014 and count $18.183 million against Chicago's salary cap, the Bears deemed the him too expensive to keep on the roster, especially after they had signed former Oakland Raiders defensive end Lamarr Houston to a $35 million deal which included $15 million guaranteed.
Peppers is just the third unrestricted free agent signed by Packers general manager Ted Thompson since 2009, and the first major move since he signed Charles Woodson in 2006. The club's other two free-agent splash signings since 2009 were center Jeff Saturday, who played only one season, and defensive end Anthony Hargrove, who did not make the team.
Peppers, 34, played the past four seasons with the Bears after being selected by the Panthers in the first round of the 2002 draft. He signed a blockbuster six-year deal worth $84 million in 2010, and restructured his contract on two occasions to give the Bears more cap room.
But in doing so, each time, Peppers' cap number grew in the later years of the deal. When Peppers last restructured his contract with the Bears in 2013, his cap numbers grew to $18.183 million in 2014 and $20.683 million in 2015.
Peppers led the Bears last season with 7.5 sacks -- the fewest he's had in a Chicago uniform. Peppers has 118.5 career sacks, which ranks second in the league since his entry (2002).
In four years playing for the Bears, Peppers started in every game (64), and racked up 37.5 sacks in addition to making the Pro Bowl in every season with the team except for 2013. Peppers earned $53.5 million throughout his tenure with the Bears.
ESPN.com Packers reporter Rob Demovsky contributed to this report.