The right-hander could have accepted a one-year deal at $15.8 million, or rejected it outright to test the open market, but the two-year deal will assure him a larger guarantee without the risk of hitting the market tied to a compensatory draft pick.
For the Blue Jays, they will lock in another starter for 2016 and 2017 while spreading the cost over two seasons.
Estrada will join Marcus Stroman, R.A. Dickey and Drew Hutchison in a rotation that looks a bit less threadbare now, although ideally the Blue Jays would like to add two more starters.
Estrada enjoyed a career year in 2015 when he was 13-8 with a 3.13 ERA (fifth in the AL) in 34 games, 28 of them starts. The 32-year-old also impressed while winning a pair of elimination games during the post-season.