Newton now will step into the mix to try to help replace former Patriots signal-caller Tom Brady, who left to join the Tampa Bay Buccaneers in free agency. The Patriots did not select a quarterback in April's draft, with 2019 fourth-round pick Jarrett Stidham and 11-year veteran Brian Hoyer atop the depth chart.
A source familiar with the Patriots' thinking said the agreement with Newton was appealing to the team as a low-risk, high-reward situation, factoring in Newton's health, a modest contract and New England's transition at quarterback without Brady.
In a brief message posted on Instagram on Sunday night, Newton wrote, "I'm excited as I don't know what right now!" along with the hashtag "#LETSgoPATS."
The Carolina Panthers released Newton, the No. 1 overall selection in 2011, on March 24, ending their nine-year relationship.
Carolina moved on from its one-time franchise quarterback after agreeing to a contract with free agent Teddy Bridgewater to become the team's new starter.
Newton continues to rehab from foot surgery and had a physical in Atlanta on March 23 that was coordinated by the Panthers and his agency, sources told Schefter.
Newton, who turned 31 in May, passed the physical and is healthy, with both his shoulder and foot "checking out well," a source told Schefter. "He is hungrier than ever and eager for the next opportunity."
In New England, where head coach Bill Belichick often says that players determine their roles based on performance, Newton will have to beat out Stidham and Hoyer, who had previously been leading on-field workouts this offseason. The Patriots also currently have rookie free agents J'Mar Smith and Brian Lewerke on the quarterback depth chart.
Caesars Sportsbook moved the Patriots from 25-1 to 20-1 to win the Super Bowl with the addition of Newton, and from 10-1 to 9-1 to win the AFC.
Newton was the NFL MVP in 2015, when he accounted for 45 total touchdowns in the regular season and led the Panthers to an appearance in the Super Bowl, a 24-10 loss to the Denver Broncos. The Panthers have been to the playoffs only once since then, a wild-card loss to the New Orleans Saints in 2017.
Newton, who holds most of Carolina's career passing records, missed 14 games last season with a Lisfranc injury and the final two games of the 2018 season with a shoulder injury that also required surgery.
Overall, he has passed for 29,041 yards with 182 touchdowns and 108 interceptions and has rushed for 4,806 yards and 58 touchdowns.
ESPN's David Newton contributed to this report.