Marrone went 15-17 in the past two seasons with the Bills before opting out of his contract earlier this month because of uncertainty over possible organizational changes. The clause in his contract that allowed him to do that also guaranteed his $4 million salary in 2015.
Marrone's hiring means offensive line coach George Yarno will not return to the Jaguars in 2015, according to a team spokesman. The Jaguars announced on May 29 that Yarno had been diagnosed with cancer and he continues to receive treatment. He remains under contract.
Marrone, who went 23-25 as Syracuse's coach from 2009 to 2012, has coached in the NFL for nine seasons, including three seasons as the offensive coordinator in New Orleans (2006-08).
The Jaguars are still searching for an offensive coordinator to replace Jedd Fisch, whom coach Gus Bradley fired on Dec. 30. Oakland Raiders quarterbacks coach Greg Olson is expected to be hired for that position.
The Jaguars play the Bills next season in London on Oct. 4.
Bills co-owner Terry Pegula has said he was "shocked,'' by Marrone's abrupt departure on New Year's Eve. Safety Aaron Williams blasted Marrone in a tweet, posting "Lost all respect!!''
Running back Fred Jackson referred to Rex Ryan as "an upgrade'' at coach. And Ryan said during his introductory news conference that the Bills deserve to have a loyal coach -- a clear shot at Marrone.
Marrone stepped down after leading the Bills to a 9-7 finish. It was the team's first winning season since 2004.
The Associated Press contributed to this report.