The one-year deal includes a signing bonus of more than $9.6 million, with a base salary of $990,000 and incentives up to $3 million, a source told ESPN's Field Yates.
Fuller, who will turn 27 in April, was drafted by the Texans with the 21st overall pick in the 2016 draft and was playing on his fifth-year option before he was suspended in November for violating the NFL's policy on performance-enhancing substances. The six-game suspension will carry over to Week 1 of the 2021 season.
The Dolphins and quarterback Tua Tagovailoa desperately need offensive playmakers who can threaten defenses with speed, separation and ability to create yards after catch. Enter Fuller, who has been one of the NFL's best deep threats throughout his NFL career. He should stretch defenses in a way Miami couldn't in 2020.
Fuller set career highs in 11 games last season with 53 receptions for 879 yards and eight touchdowns.
Tagovailoa, meanwhile, only attempted two passes with more than 50 yards of air distance last season, and his longest completion in 2020 resulted in a 35-yard gain, according to ESPN Stats & Information. Fuller had six receptions longer than that last season.
He joins a Dolphins receiving room that includes receiver DeVante Parker and tight end Mike Gesicki. Miami also could add a top receiving option -- such as DeVonta Smith, Ja'Marr Chase, Kyle Pitts or Jaylen Waddle -- through the draft.
In five NFL seasons, Fuller has played in 53 of 80 games, only once playing more than 11 games in a season. But when he was on the field, he was a difference-maker for Houston, averaging 58.7 yards per game with 209 receptions for 3,110 yards and 24 touchdowns in his career there.
ESPN's Cameron Wolfe and Sarah Barshop contributed to this report.