The deal comes a week after the Eagles lost Michael Vick to the Jets.
Sanchez's deal is for $2.25 million and includes a $750,000 signing bonus, a league source told ESPN NFL Insider Adam Schefter. The contract also includes up to an additional $1.75 million in bonuses, bringing the maximum value of the deal to $4 million. Sanchez can achieve his bonuses by playing up to 90 percent of the Eagles' offensive plays.
The Eagles have called a news conference for 10:30 a.m. ET Friday to introduce Sanchez.
Sanchez, released last Friday as soon as Vick's deal with the Jets was complete, arrived in Philadelphia on Wednesday night and underwent a medical exam Thursday morning.
The parameters of the contract were set Monday, but the medical check was key because Sanchez is recovering from surgery on his throwing shoulder -- a torn labrum that caused him to miss the entire 2013 season.
Sanchez, who resumed throwing recently, is said to be about 80 percent healthy. His hope is to be ready for OTA practices later in the spring. He also had arthroscopic knee surgery last season.
Nick Foles is the Eagles' starter, but Sanchez's presence should add some intrigue. Sanchez, 27, is 33-29 as a starter, and he has four playoff victories. He was the presumed opening day starter last season after outplaying rookie Geno Smith in the preseason, but he injured his shoulder in the fourth quarter of the Jets' third preseason game.
Sanchez joins another former USC quarterback, Matt Barkley, on the Eagles' depth chart. Presumably, Sanchez will be the No. 2.
"I've said many times that we will always look to add quality players at the quarterback position," Eagles coach Chip Kelly said. "We consider it a key position in this game, so having the chance to add Mark to that group was a no-brainer for us.
"Mark has started 68 games in his career and has taken his teams deep into the playoffs multiple times, so we really like what he brings to the table from an experience standpoint. I also had the chance to see Mark play in college and have always had respect for his game and athletic ability."
Vick was the Eagles' Week 1 starter last season, but he was injured and yielded to Foles, who threw 27 for touchdowns and only two interceptions and made the Pro Bowl. Vick, a free agent, wanted a chance to start, so he left for the Jets, who promised him the opportunity to compete against Smith.
As soon as Vick signed, the Jets cut Sanchez, who drew immediate interest from several teams. By Monday, it was clear he was headed to the Eagles.
Kelly got to see Sanchez play during their days in the Pac-10. Kelly was Oregon's offensive coordinator in 2007 and '08, when Sanchez started against the Ducks. He played poorly in a 24-10 loss but rebounded the following year with three touchdown passes in a 44-10 rout of Oregon.
Sanchez, the fifth overall pick in the 2009 draft, reached the AFC Championship Game in his first two seasons. The Jets regressed after that, going 14-18 over the next two seasons and missing the playoffs each time.
"There are a lot of positive qualities to him," Kelly said.
If history repeats, Sanchez will get a chance at some point to start for the Eagles, who have started more than one quarterback in 19 of the past 23 seasons. Foles, entering his third year, never has played a full season.
"You can never have enough talent at the quarterback position on your roster, so when Mark became available we immediately became interested," Eagles general manager Howie Roseman said.
"He was obviously a very highly touted player coming out of USC and has had valuable experience in this league. He'll have the chance to come in and learn the playbook, and we feel he'll be a nice veteran addition to the quarterback room."
Seattle Seahawks coach Pete Carroll, who coached Sanchez at USC, said he "can't imagine him not being a starter" in the league.
Information from ESPN NFL Insider Adam Schefter was used in this report.