Terms of the contract were not disclosed.
Free agent Downs, 34, who pitched the last five seasons for the Toronto Blue Jays, has been one of the league's most durable middle relievers.
In 67 appearances for Toronto in 2010, Downs was 5-5 with a 2.64 earned run average. Since 2007, he has compiled an ERA of 2.36, which was the lowest among left-handed relievers over the span and fifth lowest overall in the American League.
"He has competed at a very high level for several years, and his addition adds tremendous depth to our bullpen," said Angels general manager Tony Reagins, the Major League Baseball website (mlb.com) reported.
Last week, the Angels added another left-hander by signing Hisanori Takahashi to a two-year deal. Takahashi appeared in 53 games last season for the New York Mets, posting a 10-6 record with eight saves and a 3.61 ERA.
(Writing by Larry Fine in New York; Editing by Greg Stutchbury)