Simmons, a third-round pick in the 2016 draft who is set to enter his fifth season, was poised to be an unrestricted free agent, but Broncos president of football operations/general manager John Elway said at the combine that he would use the franchise tag to retain him if a long-term contract couldn't be reached.
"We remain focused on reaching a long-term contract agreement with Justin, and he's a big priority for us," said Elway. "This is a placeholder in that process and our goal is the same -- to make sure that Justin is a Bronco for a long time."
Simmons, 26, played at a Pro Bowl level in his first year in Vic Fangio's system. He was tied for second on the team with 93 tackles and led the team with four interceptions and 15 passes defensed.
He is one of the most active players in the community and was the Broncos' nominee this past season for the Walter Payton Man of the Year award.
The Broncos know re-signing Simmons for the long term will take elite money. The five highest-paid safeties in the league all have contracts that average between $14 million and $14.6 million. The Broncos are scheduled to have more than $60 million worth of salary cap space.
Simmons has started 48 games in his career, including 16 in each of the past two seasons. He has also played every defensive snap in each of the past two seasons. He has 11 interceptions, 28 passes defensed and two sacks in his career.
ESPN's Jeff Legwold contributed to this report.