Royal agreed to a three-year, $13.5 million contract, including $6 million guaranteed.
"I'm just happy to be with a great organization," Royal told The Associated Press. "I've always had a lot of respect for the San Diego Chargers. Whenever we had to play them, we knew it was going to be a tough game, a hard-fought game, a high-scoring game, one that would come down to the fourth quarter. We knew they would be a well-coached, tough football team to play. When I got the opportunity to join them, I knew that I really had to give them a serious look."
In September 2008, after referee Ed Hochuli's infamous blown call in Denver, the rookie Royal caught a fourth-down touchdown pass from Jay Cutler and then ran the same route to catch the winning two-point conversion.
In 2009, Royal returned a kickoff and a punt for touchdowns in a 34-23 Monday night victory at San Diego. The kickoff return went for 93 yards and the punt return was 71 yards.
"They were big plays for me," Royal said. "They're something I'll always remember, but I guess it's time to put those to rest and make new highlights."
Denver won the AFC West last season behind Tim Tebow. San Diego has missed the playoffs the last two seasons after a four-year run as division champion.