The deal is for the duration of the 2023 season. The approvals and physical exams are expected to take place in time for Hamid to play in Saturday's match against Oakland Roots SC.
"The signing of Bill Hamid will potentially be the greatest signing in club history and certainly one of the biggest in USL," 901 FC sporting director and former U.S. national team goalkeeper Tim Howard said.
"He comes to 901 FC as he enters the prime of his career. Bill has a winning pedigree, having lifted trophies domestically and internationally. Most importantly, we believe that his time spent as a member of the USMNT will prove pivotal to our locker room and on-field success."
Hamid, 32, had recently been linked with Scottish Premiership side Dundee United, but manager Jim Goodwin told The Herald last week that the club "decided to go in a different direction."
He also had a training stint with Premier League club Crystal Palace. He joins a Memphis side that boasts former U.S. international goalkeeper Tim Howard as sporting director, and former Atlanta United reserve team head coach Stephen Glass as manager.
Hamid signed a homegrown player deal with D.C. United in 2009, and aside from a brief stint with Danish club Midtjylland in 2018, he has spent the entirety of his career with the MLS club.
But Hamid has been hampered by injuries in recent years. He was limited to 10 starts last season due to a left hand injury which required surgery in June. He is the all-time leader for DCU with 89 shutouts and 976 saves. He was named MLS Goalkeeper of the Year in 2014 and led the club to the 2013 U.S. Open Cup title. He became a free agent after the 2022 season.
At international level, Hamid made eight appearances for the U.S., and was part of the squads that won the CONCACAF Gold Cup in 2013 and 2017.