McAfee made the announcement on NFL Network on Friday. According to NFL.com's Ian Rapoport the contract calls for McAfee to be paid $5 million in guarantees. The team used the franchise tag on McAfee last offseason.
McAfee has been a member of the Colts exclusively throughout his entire five-year career.
He was originally a seventh-round pick in the 2009 NFL Draft out of West Virginia and averaged 46 yards a punt during last season.
"I'm super excited about it and I can't wait to get back to Indy," McAfee said.NFL free agency: Latest rumors, buzz