Wallace, who was released by the Vikings last week, chose the Ravens over a handful of interested teams, saying he wanted to play for a quarterback like Baltimore's Joe Flacco who could play to his strength and throw the ball deep.
While Wallace didn't mention Vikings quarterback Teddy Bridgewater by name, he did seem excited about a change of scenery and a change of quarterback.
"When this process started, I knew I wasn't going back to Minnesota. I was like, 'I need a good quarterback,'" Wallace said at his introductory news conference. "I need a quarterback who is proven and can get things done. Flacco has always been that guy."
A source told ESPN's Adam Schefter that the deal is for two years and is worth $11.5 million.
Wallace brings much-needed speed to the Ravens, who averaged an NFL-worst 10.4 yards per reception. In seven NFL seasons, Wallace established himself as one of the more dangerous deep threats in the league, averaging 15.1 yards per reception.
"This is a guy that changes the face of our offense dramatically," Ravens coach John Harbaugh said. "He adds an element that's very important in the National Football League. It's an opportunity for him to get with Joe and match their talents in a way that's going to be really special."
Wallace, 29, is familiar with the Ravens after playing some heated games during his first four seasons with the Pittsburgh Steelers. Dressed in a purple Ravens polo shirt, Wallace said he already felt at home in Baltimore despite switching sides in the rivalry.
"I told coach, 'It feels weird being on the other side, but I'm all for it,'" Wallace said. "I just have to switch my whole mentality. I used to hate purple. Now, I love purple."
Wallace has watched his receptions and receiving yards decline each season since 2013. With Flacco as his quarterback, Wallace is eager to answer those who believe he can no longer be a legitimate weapon in the NFL anymore.
"We just have a couple of months to wait and see. I'll show everybody," Wallace said. "I've been taking a lot of heat for about three years in a row. I promise I'll get the last laugh."
The addition of Wallace provides another weapon for Flacco. Last week, the Ravens signed tight end Benjamin Watson to a two-year, $8 million deal.
The Ravens made wide receiver a priority in free agency because Steve Smith is coming off a season-ending Achilles injury and first-round pick Breshad Perriman didn't play a down after spraining his knee. Baltimore could address wide receiver in the draft as well.
The Vikings released Wallace last Tuesday, parting ways with the receiver a year after they sent a fifth-round pick to the Miami Dolphins for him.
The team had hoped Wallace would become a deep threat in offensive coordinator Norv Turner's offense, but the 29-year-old caught just 39 passes for 473 yards and 2 touchdowns, as the team's downfield passing game never materialized.
The Vikings recouped $11.5 million in cap space for 2016 by releasing Wallace. The wide receiver had signed a five-year, $60 million contract with the Dolphins in 2013.
Wallace came to Minnesota after two disappointing years with the Dolphins. Wallace, who averaged 17.2 yards per catch during his first four seasons with the Steelers, hasn't eclipsed 13 yards per catch since. He passed the 1,000-yard receiving mark twice with the Steelers (1,257 in 2010 and 1,193 in 2011). He was selected to his only Pro Bowl in 2011.
ESPN Vikings reporter Ben Goessling contributed to this report.