The deal is for two years for a total of $1.75 million, a source told ESPN.com.
The Rangers also re-signed forward Vaclav Prospal, an unrestricted free agent, to a one-year deal worth $1 million in base salary plus bonuses, a source said.
Last season, his first with the Rangers, Prospal had 20 goals and 38 assists, second on the team in points behind Marian Gaborik. He has 218 goals and 439 assists in 13 NHL seasons with the Rangers, Philadelphia Flyers, Ottawa Senators, Florida Panthers, Tampa Bay Lightning and Anaheim Ducks.
The 32-year-old Biron was an unrestricted free agent.
"I'm very excited, I think it's going to be fun," Biron told ESPN.com. "It's a great organization and a great team. Looking forward to joining back up with Chris Drury, a great guy I played with in Buffalo. Really looking forwad to playing with Henrik Lundqvist and working with [goalie coach] Benoit Allaire. And I'm eager to get back to where I think my game can be. The Rangers are going to give me an opportunity to be able to do that."
He earned $1.4 million this past season with the New York Islanders, posting an .896 save percentage and 3.27 goals-against average.
He spent much of the season battling Dwayne Roloson for the starting position, but Roloson had the bulk of the work, starting 49 games to Biron's 26.
The Rangers signed tough guy Derek Boogaard to a four-year deal, a source told ESPN.com. The forward had 105 penalty minutes in 57 games this past season with the Minnesota Wild, who drafted Boogaard in 2001.
The team also re-signed forward Erik Christensen and agreed to terms with Derek Stepan, who captained the winning U.S. team at the world junior championship.
Pierre LeBrun covers the NHL for ESPN.com. Information from The Associated Press was used in this report.