The deal is worth $3 million for 2020 and would be worth $6 million over two years if the option is exercised, according to Mark Feinsand of MLB.com.
Iglesias, who turned 30 years old Sunday, recorded 11 home runs with a .724 OPS for the Cincinnati Reds in 2019. He's been considered one of the best defensive shortstops in baseball since coming into the league in 2011, and he is projected to start for Baltimore next season.
The signing is only the second major-league contract that Baltimore has dished out during free agency this offseason. The other involved inking reliever Kohl Stewart to a one-year deal at the end of December.