The team announced the deal on Thursday but didn't reveal terms. A source told ESPN's Adam Schefter that Watkins' contract is for one year and worth up to $4 million.
The Packers have lost three of their top receivers this offseason, headed by All-Pro Davante Adams in a trade to the Las Vegas Raiders. They also lost Marquez Valdes-Scantling (Chiefs) and Equanimeous St. Brown (Bears) in free agency.
They haven't used a first-round pick on a receiver since 2002 (Javon Walker) but have two picks in each of the first two rounds after the Adams trade, putting them in position to address that spot high in the draft.
Packers coach Matt LaFleur coached Watkins with the Rams in 2017, and Packers receivers coach Jason Vrable was in Buffalo when the Bills drafted him fourth overall in 2014.
Watkins, 28, has had difficulty staying healthy throughout his career.
He continued to struggle with injuries in his only season with the Baltimore Ravens in 2021, finishing with career lows in receptions (27) and receiving yards (394).
He has missed 30 games over the past seven seasons, and he hasn't played a full season since his 2014 rookie season.
He made two of the biggest catches of the season for Baltimore, setting up winning scores against the Detroit Lions and Chicago Bears, but Watkins had no catches -- and just three targets -- in his final four games as he fell behind Marquise Brown, Rashod Bateman and Devin Duvernay on the depth chart.
ESPN's Jamison Hensley contributed to this report.