The five-time MVP agreed to a $4 million pay cut to $15 million, but he can earn all of it back through incentives.
Manning mulled retirement after the Broncos' playoff loss to the Indianapolis Colts. But he determined he still had the health and hunger to keep playing at age 39.
"I'm excited to get to work and get to know the new coaches and looking forward to trying to make 2015 a special year," Manning told the Denver Post.
Manning, who won a title with the Colts in 2006, met with Broncos general manager John Elway a few weeks ago after taking some time to decompress from an arduous season and told him he wasn't ready to retire.
The sides hashed out a new deal Wednesday contingent on his passing his physical.