The 30-year-old has averaged 15.3 points and six rebounds over seven seasons with the Wizards and Dallas Mavericks.
Howard, who was acquired in a trade in February with Dallas, played only four games with the Wizards before suffering a season-ending knee injury.
"We were impressed with Josh's versatility, how well he fit in with our team and his attitude and work ethic both before and after his unfortunate knee injury," Wizards general manager Ernie Grunfeld said in a statement on Friday.
Terms were not disclosed, but the Washington Post said Howard signed a one-year incentive-laden contract worth about $4 million.
(Writing by Steve Ginsburg; Editing by Greg Stutchbury)