Freeney, 37, was in Seattle on Tuesday to work out and take a physical for the Seahawks. He later tweeted he'd joined the team.
A source told ESPN's Adam Schefter that the deal is for one year.
Seattle has a need at defensive end and an open roster spot after placing starter Cliff Avril on injured reserve with a neck/spine injury.
Freeney averaged roughly 23 snaps per game in 2015 with the Arizona Cardinals and 28 last season with the Atlanta Falcons. He likely will have a similar rotational role in Seattle. Frank Clark has played well while starting in place of the injured Avril, so Freeney figures to slot into the rotation behind Clark and Michael Bennett, who starts on the other side.
A seven-time Pro Bowler who entered the league with the Colts as the 11th overall pick in 2002, Freeney said he has contemplated retirement every year since 2012. He joined the Falcons on a one-year deal in August 2016 and played an integral part in their run to the Super Bowl, but became a free agent at the end of the season.
Freeney was utilized almost exclusively as a pass-rusher through the 2016 regular season and played through a quadriceps tear, an injury that eventually led to him missing one game. The Falcons routinely rested Freeney on Wednesdays throughout the season to help preserve his body.
He finished with three sacks, four tackles for loss and 10 quarterback hits in 15 games, with one start. He started two of three postseason games and registered a sack, a tackle for a loss and three quarterback hits.
Freeney has 122.5 career sacks, which is third among active players behind Julius Peppers (150.0) and DeMarcus Ware (138.5). The seven-time Pro Bowl selection and 2005 AFC Defensive Player of the Year spent his first 11 NFL seasons with the Colts and has also played for the Chargers and Cardinals during his 15 NFL seasons.
ESPN's Brady Henderson and Vaughn McClure contributed to this report.