Financial terms of the deal weren't released Thursday.
Gragnani, Buffalo's 2005 third-round draft pick, has an opportunity to play with the Sabres this season after spending last season with AHL Portland. Noted for his offensive skills, Gragnani had 12 goals and 31 assists in 66 games last season.
In three minor league seasons, the 23-year-old Gragnani has 35 goals and 111 assists in 220 games. He has no points in six NHL games with the Sabres.