The incentive-laden deal provides downside protection for the club if Maeda underperforms or is injured, while offering a lucrative upside for Maeda if he successfully transitions from Japanese ace to a Major League contributor.
The Dodgers also will pay Maeda's Japan team, the Hiroshima Carp, a $20 million release fee.
Maeda, 28 in April, will become the only healthy right-hander in an otherwise all-lefty rotation, joining Clayton Kershaw, Brett Anderson, Alex Wood and Scott Kazmir, who signed last week.
Maeda and Kazmir were the best remaining options for the Dodgers after they were outbid by Arizona for Zack Greinke.