The team did not reveal terms of the contract but a league source told ESPN NFL Insider Adam Schefter that DeCoud's deal is for five years with a $17.5 million base package. DeCoud received $4 million in guarantees and $6.25 million in potential bonus dollars. The maximum value of the deal is $21 million.
"Thanks for all the congratulations, everyone," DeCoud told his followers on Twitter. "Looking forward to taking my game to the next level and help the falcons take that next step."
DeCoud, who turns 27 later this month, played in 94.9 percent of the Falcons' snaps last season and led the team with four interceptions and was third in tackles with 109.
A third-round pick by the Falcons in 2008, he has been a starter in 47 of his 58 career games and has eight career interceptions, four forced fumbles and 19 passes defensed.
He was one of several Falcons defensive players scheduled to be free agents next Tuesday, March 13. Atlanta's other key defenders who could leave via free agency include linebacker Curtis Lofton, who led the team in tackles, and defensive end John Abraham, who led with 9½ sacks.
The Falcons used their franchise tag last week on cornerback Brent Grimes, who led the team with 17 passes defensed in 2011.
Information from ESPN.com NFC South blogger Pat Yasinskas and The Associated Press was used in this report.