The former All-Star will make a base salary of $650,000 if he makes the Major League club out of Spring Training.
Ensberg, 33, hit .203 in 28 games with the Yankees in 2008 and .189 in 52 games with Cleveland's Triple-A team in Buffalo.
"Morgan's a guy who has obviously had a tremendous amount of success, and he had a rough year last year," said Rays executive vice president of baseball operations Andrew Friedman. "But we feel like the guy has a great upside. He does a lot of things we like. This is a guy a couple of years ago that one of our scouts put an 80 [on a 20-80 scouting scale] on. That's the highest grade you can get. It's a great upside for us. It's a situation for him that we feel like, in this environment, it may give him a chance to get back on track and have some success and help the team."
Ensberg has played eight Major League seasons with Houston, San Diego and New York, compiling a .263 career average with 110 home runs and 347 RBIs. His best season came with the Astros in 2005, when he hit .283 with 36 home runs and 101 RBIs.
Ensberg told ESPN.com he would have an opportunity to back up Evan Longoria at third base and Carlos Pena at first for the Rays and that he's also willing to fill in at second base and left field. If he doesn't make the Major League roster, he will begin the season with Triple-A Durham.
"I haven't had a lot of success lately, so I'm really excited about this," Ensberg told ESPN.com.
Bill Chastain is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.