Davison's deal includes $4.5 million guaranteed, a source told ESPN. He signed a one-year contract worth $895,000 with the Falcons in 2019 after playing four seasons with the rival New Orleans Saints.
Davison, 27, quickly established himself as a reliable run-stuffer and was one of the positives for the 7-9 Falcons. He finished the season with 55 total tackles, four tackles for loss, one sack and a fumble recovery.
With NFL free agency set to begin Wednesday, the Falcons have made a point to re-sign some of their own players first. On Saturday, they agreed to a three-year contract extension with fullback Keith Smith, who could help as a blocker in a struggling rushing offense that ranked 30th in the league at 85.1 yards per game. The team previously re-signed kicker Younghoe Koo, punter Ryan Allen, offensive lineman John Wetzel and defensive end Steven Means to one-year contracts.
The Davison deal is significant based on how much emphasis the Falcons are putting on shoring up the defensive line under new coordinator Raheem Morris. They have a disruptive star on the line in Pro Bowl defensive tackle Grady Jarrett, but Jarrett needs more help around him.
Davison is expected to once again play a significant role against the run. The Falcons hope to improve a pass rush that tied for 29th in the league in sacks (28) by adding personnel through free agency or via the draft.
But the Falcons have limited salary-cap space despite the league increasing the cap by $10 million from last year to $198.2 million. However, the new collective bargain agreement, without the rule restricting the yearly increase of a player's salary to no more than 30%, would allow the Falcons to structure a contract in such a manner to limit the cap hit this season if they want to pursue an impact free-agent pass-rusher.
The team already announced it has no intention of re-signing former first-round draft pick Vic Beasley Jr., who led the NFL with 15.5 sacks in 2016.