Eurosport - Fri, 30 Jul 14:41:00 2010
The 39-year-old penned the deal, which includes the option of a further 12 months, after passing a medical at Ashton Gate on Friday morning.
James has been looking for a new club since leaving Portsmouth in the wake of their relegation from the Premier League at the end of last season.
He said: "I've had offers to stay in the Premier League but it is more important that I play football - which I love - for the right club and be a family man.
"I had a long conversation with the chairman Steve Lansdown and I liked what he said about the club and his ambition. I know all about the plans for a new stadium and desire to win promotion to the Premier League.
"The club is ambitious and that's what I am. The south west has not had a club in the Premier League and that needs to change."
Lansdown said: "I'm delighted David James has agreed to sign. My ambition is for this football club to play at the highest level - the Premier League - and in the best surroundings, hence the work on the training ground and new stadium.
"We need good quality players to make that happen and that's why I'm thrilled that David has agreed to come on board."