Jackson, 28, is 60-60 with a 4.46 ERA in 10 seasons with Tampa Bay, the Dodgers, the White Sox, Arizona, St. Louis and Detroit. He was one of the top two free-agent pitchers still available on the market along with Roy Oswalt.
"We saw an opportunity here to acquire a young, hard-throwing, power-pitching, innings-eating type of starting pitcher, and we thought it was good value at a good term," Nationals general manager Mike Rizzo said of the signing during a telephone conference call on Thursday.
The contract is reportedly worth between $9 million and $12 million.
Jackson was 12-9 overall in 2011 with the White Sox and Cardinals and 5-2 for St. Louis down the stretch as the Cardinals surged into the playoffs and won the World Series. He went 1-1 with a 5.60 ERA in four postseason appearances.
He earned a win in Game 4 of the NL Division Series against the Phillies, but walked seven in a Game 4 loss at the World Series, the most in a Series outing in 14 years.
Jackson had a .339 opponents batting average with no one on base and a .239 average with runners on base, an indication he was struggling out of the windup.
"We're going to make a few tweaks to his delivery," Rizzo said. "Last year he was a different pitcher out of the windup than he was from the stretch."
Jackson slots into an upgraded Washington rotation that includes Stephen Strasburg, Gio Gonzalez and Jordan Zimmermann. Ross Detwiler, Chien-Ming Wang and John Lannan are also in the mix for spots, but the Nationals have reportedly begun entertaining trade offers for Lannan, who just lost his salary arbitration case and will receive $5 million this season.
Strasburg missed most of last season following Tommy John surgery in September 2010. Wang returned last July after missing two years because of right shoulder surgery and is coming off a career-high 161 1/3 innings.
"We felt that we had an innings shortage," Rizzo said. "Out of the eight playoff teams last year, six of those eight teams had two 200-plus-inning pitchers."
Jackson pitched a no-hitter for Arizona at Tampa Bay on June 25, 2010, when he walked eight, one shy of the record for a no-hitter.
Jerry Crasnick is a senior baseball writer for ESPN.com. Information from The Associated Press was used in this report.