The contract is worth $795,000, according to a source, including a $730,000 base salary and a $65,000 signing bonus.
"Ed is a young player who has shown he is a capable blocker as well as receiver in the league," Panthers coach Ron Rivera said in a statement. "He proves experienced depth at the tight end position and we look forward to having him in the mix."
Dickson will work in tandem with Panthers tight end Greg Olsen.
Dickson has excellent size and speed, but he got off to a rough start to last season after tearing his hamstring during training camp.
Dickson, 26, started 14 of 16 games last season and caught 25 passes for 273 yards and one touchdown.
Dickson has recorded 111 career receptions for 1,178 yards and seven touchdowns in four NFL seasons after being drafted in the third round out of Oregon in 2010.
In 2011 when he was the primary tight end, Dickson caught a career-high 54 passes for 528 yards and five touchdowns.