Snead, who was a restricted free agent, agreed to the offer sheet with the Ravens last week. The Saints had five days to match the offer; it is worth $7 million with $3.4 million in incentives and includes a $2 million signing bonus, according to a source.
Snead thanked the Saints organization and their fans in a social media post Monday afternoon.
The deal with Snead takes the Ravens out of the running for former Dallas Cowboys receiver Dez Bryant, a source told Schefter. The move would not preclude Baltimore from taking a wide receiver early in this week's NFL draft.
The Saints' decision is not surprising because Snead's role diminished last year and the team recently signed receiver Cameron Meredith to a similar two-year deal in the $10 million range. New Orleans also re-signed veteran backup receiver Brandon Coleman last week.
The Ravens have been looking for a slot receiver to pair with free-agent additions Michael Crabtree and John Brown. Baltimore brought in Snead for a visit at the end of March, and he caught passes from Robert Griffin III.
Snead, 25, was one of the most underrated slot receivers in the NFL in 2015 and 2016, totaling 141 catches for 1,879 yards and seven touchdowns. He had only eight catches last year because of limited playing time, which stemmed from a three-game DUI suspension to start the season and an early-season hamstring injury.
General manager Ozzie Newsome said at the NFL scouting combine that Baltimore wanted to revamp the position. The Ravens' top two wide receivers from last season -- Mike Wallace (signed with Philadelphia) and Jeremy Maclin (cut) -- are not on the roster.
Where Snead will make his biggest impact is on critical situations. In 2015 and 2016, Snead ranked fifth among wide receivers with 50 catches on third downs. Only Antonio Brown, DeAndre Hopkins, Odell Beckham Jr. and Demaryius Thomas produced more.
Extending drives has been an ongoing problem for Baltimore. Since winning the Super Bowl six seasons ago, the Ravens have been the seventh-worst offense on third downs, converting 37.1 percent of the time.
CBS Sports first reported the Saints planned to decline to match the offer on Saturday.
ESPN's Jamison Hensley and Mike Triplett contributed to this report.