Agent David Bauman says Neal wanted to join a playoff team after finishing last season with the league-worst Minnesota Timberwolves.
The 30-year-old Neal is returning to his roots: He was born in Maryland and played college basketball at Towson.
He has averaged 9.9 points and 38.1-percent shooting on 3-point attempts during five NBA season with four franchises. He was traded to Minnesota by Charlotte in February.
By agreeing to a one-year deal with Washington, Neal gets a chance to increase his value with a strong season and return to the free-agent market.