The team announced the move Tuesday.
Braden made three starts last season before being sidelined by a shoulder injury. He was 1-1 with a 3.00 ERA before going on the disabled list April 18. He had surgery to a repair a torn capsule in his left shoulder May 17.
The 28-year-old Braden is 26-36 with a 4.16 ERA in 94 career appearances during five seasons with Oakland. He pitched a perfect game against Tampa Bay on May 9, 2010.
Braden can make an additional $400,000 in performance bonuses: $75,000 each for 15, 20, 25 and 30 starts, and $100,000 for 32 starts.