Thomas joins the Wizards on the veteran's minimum, a source told Candace Buckner of the Washington Post.
The 30-year-old has been given a chance to rebuild his value after an injury-plagued past couple of seasons. Thomas missed the first half of the 2018-19 campaign due to the same hip injury that limited him the season before.
Even after he was deemed healthy enough to play, Thomas failed to regularly crack the Denver Nuggets' rotation this past season. The veteran guard averaged 8.1 points on 34.3 percent shooting across 12 regular-season appearances, and he didn't play in a postseason game.
"I'm going to get back to a level that I was playing at," Thomas recently told Wojnarowski. "I'm excited to show what I can do again."
Thomas will give the Wizards some point guard depth with star John Wall set to miss the majority, if not all, of next season due to injury.
The two-time All-Star isn't far removed from averaging a career-high 28.9 points per contest in 2016-17, and he was once among the Association's top reserve players. During the 2014-15 season, Thomas finished second in Sixth Man of the Year voting.