The announcement was made by general manager Tony Reagins. The Associated Press reported that the deal is worth $10 million.
Having signed Jered Weaver, Mike Napoli, Howard Kendrick and Reggie Willits, the Angels have three remaining arbitration-eligible players: starting pitcher Joe Saunders, shortstop Erick Aybar and catcher Jeff Mathis.
Izturis is coming off his best season offensively, hitting .300 in 114 games with 22 doubles, eight homers and 65 RBIs in 387 at-bats. He excelled defensively while spending most of his time at second base, platooning for much of the season with Kendrick.
In 64 starts at second, Izturis made only two errors for a .993 fielding percentage. He had a .977 fielding percentage at shortstop in 28 games and did not make an error in five games at third.
A natural shortstop, Izturis had shared that position in 2008 with Aybar, who emerged as a star as the everyday shortstop last season.
Izturis gives the Angels coverage at third base as well as shortstop and second base. Brandon Wood is expected to get first crack at departed Chone Figgins' job at third, but Izturis is a viable option there.
"Izzy's a guy who can hit anywhere in the lineup, and he's an outstanding defender at three positions," Angels manager Mike Scioscia said.
Izturis is expected to share the leadoff spot with Aybar in Figgins' absence, and he has also been productive batting second and fifth.
The numbers support his reputation as a clutch hitter. A career .327 batter with runners in scoring position, Izturis also is a .349 hitter with the bases loaded.
Lyle Spencer is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.