Dennard signed a one-year deal with the Falcons, a source said.
In March, Dennard had agreed to a three-year, $13.5 million contract ($6 million guaranteed) with the Jacksonville Jaguars, but the two sides reached an impasse on the details, allowing Dennard to reenter free agency.
The Falcons were expected to bring in veteran help with a young cornerback trio that includes rookie first-round pick A.J. Terrell, second-year player Kendall Sheffield and third-year player Isaiah Oliver.
Sheffield showed promising signs as a rookie that could translate into a lead role this season. The addition of Dennard, 28, could allow Sheffield to play outside, with either Terrell or Oliver manning the other outside corner spot and the 5-foot-11, 200-pound Dennard playing in the slot. Dennard can play inside or out and was slated to compete outside in Jacksonville.
Dennard was one of the Bengals' most effective defensive backs in 2019, leading the team in catch rate allowed below expectation at 16.3%, according to NFL Next Gen Stats. Overall, he allowed just 16 completions on 36 targets last season.
The Falcons, who also could have solid contributions from reserve cornerbacks Blidi Wreh-Wilson and Jordan Miller, need as many capable cornerbacks as possible against wide receivers such as Michael Thomas, Emmanuel Sanders, Mike Evans, Chris Godwin and DJ Moore and all-time great quarterbacks Drew Brees and Tom Brady in the NFC South. The Falcons, who have a new defensive coordinator in Raheem Morris, allowed 9.5 yards per pass attempt to wide receivers last season, second worst in the NFL behind the Raiders (9.6).
The Bengals primarily used Dennard as their fifth cornerback and matched him against inside wide receivers.
Dennard marks yet another former first-round pick added to the Falcons' roster this offseason. Atlanta also brought in former first-rounders in running back Todd Gurley, tight end Hayden Hurst, wide receiver Laquon Treadwell, defensive ends Dante Fowler Jr. and Charles Harris, and linebacker Deone Bucannon.
Dennard appeared in nine games in 2019 after he started the season on the physically unable to perform list following offseason arthroscopic knee surgery. He didn't make his first regular-season appearance until a Week 7 loss to Jacksonville.
Before last season, Dennard never quite lived up to expectations after he was selected 24th overall by the Bengals in 2014 out of Michigan State. He was part of a deep position group early in his career, and that, combined with injuries, limited him to four starts in the first three seasons of his career.
He emerged as a solid nickel cornerback over the past two seasons and was the primary slot corner in 2018, appearing in 13 games, though he missed three games midseason because of a shoulder injury.
He has 3 interceptions, 22 passes defensed, 2 forced fumbles, 3 sacks and 274 tackles in 77 career games.
ESPN's Ben Baby contributed to this report.