The deal includes a $4 million signing bonus and $6 million the first season, a person with direct knowledge of the deal told The Associated Press. The person spoke on condition of anonymity because terms of the contract were not announced.
Routt is still owed $5 million next month from the Raiders, who released him after the first year of a $54.4 million, five-year deal. The $11 million Routt will make in 2012 puts him among the three highest-paid cornerbacks in the NFL.
"We are excited that we were able to come to terms with Stanford," general manager Scott Pioli said. "He is a talented player, and as we have said in the past, we are always looking to add competition at every position year-round. Stanford's experience and level of play will make him a solid addition to our defense."
Routt spent several days in Kansas City before choosing the Chiefs over competing offers from Buffalo, Cincinnati, Houston, New Orleans, Minnesota and Tennessee.
"Stanford has a proven record of success in the NFL," said Chiefs coach Romeo Crennel, who will serve as his own defensive coordinator next season. "He's a talented player that has spent seven seasons in the AFC West, so he is familiar with us and our division opponents."
Routt has appeared in 110 games, starting 53 of them, over seven seasons spent with Oakland.
He emerged as one of the league's better tackling defensive backs, recording 201 stops along with 10 interceptions and 52 pass deflections. Routt had a career-high four interceptions last season while adding a team-best and career-high 15 passes defensed.
He also allowed eight touchdown passes, tied for the second-most in the NFL.
A former second-round pick of the Raiders, Routt is among the best man-to-man coverage cornerbacks in the league, a style that should fit in well with Crennel's defense.
"We are excited to have Stanford join the team," Crennel said, "and we are looking forward to getting started."
AP Sports Writer Josh Dubow contributed to this report.