The maximum value of the contract is $17 million, the source said.
Dalton will give Carolina the veteran it has been seeking to help bring along the quarterback it selects with the No. 1 overall pick in the upcoming draft. The Panthers are focused on Ohio State’s C.J. Stroud and Alabama’s Bryce Young with the first pick, according to sources, although they will continue to evaluate Florida’s Anthony Richardson and Kentucky’s Will Levis.
Dalton signed a one-year, $3 million deal with the New Orleans Saints last March to serve as the backup quarterback, but he wound up being the permanent starting quarterback after Jameis Winston got hurt early in the season.
He started 14 games, completing 66.7% of his passes for 2,871 yards, 18 touchdowns and 9 interceptions for the Saints, who finished 7-10 and missed the playoffs.
Dalton, who turned 35 in October, was a second-round pick for the Cincinnati Bengals in the 2011 NFL draft and was the starter for most of his nine seasons with the franchise. The Bengals made five playoff appearances during his tenure but went 0-5 (he was injured in the 2015 playoff loss to the Pittsburgh Steelers).
He signed with the Dallas Cowboys in 2020 as the backup to Dak Prescott but filled in as a starter for nine games when Prescott was injured. He also started six games for the Chicago Bears over the course of the 2021 season.
Dalton has started 162 of 166 games over his career, completing 62.5% of his passes for 38,150 yards, 244 touchdowns and 144 interceptions.
ESPN’s Katherine Terrell and David Newton contributed to this report.