Per ESPN's Adam Schefter, Peterson's contract is worth $1.05 million and includes incentives.
The move reunites Peterson with Darrell Bevell, his former offensive coordinator with the Minnesota Vikings. Peterson was selected to the Pro Bowl in all four seasons (2007-10) under Bevell.
"They're giving me an opportunity to play," Peterson told Anderson. "I know coach Bevell from my days in Minnesota. Ultimately I feel comfortable going there and helping them to get better."
Peterson, 35, will join fellow running backs Kerryon Johnson, second-round rookie D'Andre Swift, Ty Johnson and Bo Scarbrough as well as fullback Jason Cabinda as members of the Lions' backfield. Last season, Detroit finished 21st in the league in rushing last season at 103.1 yards per game.
Johnson apparently was pleased with Peterson's decision to join the Lions, posting on Twitter that, "If i were to take a picture with him would that be fan boying too much??"
The news of Peterson's move comes two days after he was released by the Washington Football Team.
The 2012 NFL MVP and a seven-time Pro Bowl selection, Peterson led the NFL in rushing three times and has 14,216 career rushing yards, which ranks fifth all-time and just 1,053 yards behind Lions legend Barry Sanders (15,269). Frank Gore, who is on the New York Jets' roster, is third (15,347) while Walter Payton (16,726) and Emmitt Smith (18,355) are further ahead.
Peterson's 111 rushing touchdowns are fourth-best behind Hall of Famers Smith (164), LaDainian Tomlinson (145) and Marcus Allen (123).
In 15 games last season, Peterson rushed 211 times for 898 yards and five touchdowns while adding 17 receptions for 142 yards.
Detroit opens the season against the visiting Chicago Bears next Sunday. The Lions will host Peterson's former club, Washington, on Nov. 15.
(Field Level Media)