D.C. will receive $1.5 million this year and $500,000 in 2023, plus up to $300,000 in conditional future GAM based on performance.
D.C. would receive 30% of any transfer fee if Arriola moves outside of MLS.
"I'm super excited to be joining FC Dallas and starting a new journey with this club," Arriola said in a release. "Coming to Dallas will be a great step in my career as it will continue to help me build towards my professional goals. I'm looking forward to seeing some familiar faces and I can't wait to get to work with my new teammates and staff."
The 26-year-old has 20 goals in 89 regular-season matches since joining D.C. from Tijuana in 2017.
Arriola missed most of 2020 because of a torn right ACL and played three games with Swansea during the second half of the 2020-21 season before a quadriceps injury.
Arriola has eight goals in 42 international appearances. He is training with the U.S. ahead of three World Cup qualifiers.