Schefter added it's a three-year deal worth $25.5 million with $12.75 million guaranteed.
Sheard inked a two-year, $11 million deal to suit up for the Patriots in March 2015, and he looked like an instant bargain.
After he racked up 23 sacks in four seasons with the Cleveland Browns, Sheard proceeded to tally eight sacks in his first season as a member of the Patriots. During the productive campaign, Sheard graded out as the Patriots' top defender with an overall grade of 88.2, according to Pro Football Focus' Ben Stockwell.
However, Sheard's productivity slipped a bit throughout 2016.
Although he earned eight starts over the course of 15 appearances, Sheard was limited to five sacks and 33 total tackles. He was also listed as a healthy scratch for the Patriots' Week 11 game against the San Francisco 49ers, and head coach Bill Belichick never provided much insight regarding the brief demotion.
And while Sheard returned to the lineup a week later and remained in the pass-rushing rotation throughout the remainder of the season, the one-week absence raised some eyebrows.
That said, Sheard is in the prime of his career at 27 years old and has the potential to be a steady presence off the edge for years to come.
Double-digit sacks could be a stretch, but Sheard's ability to wreak havoc as a pass-rusher and defender in coverage at the second level makes him a versatile threat who should have no problem staying on the field.
Now a member of the Colts, Sheard projects as an edge-rusher at outside linebacker after he served as a 4-3 defensive end for the Patriots.
Should the Colts envision him in that role, he would be a sensible replacement for Robert Mathis, who announced his retirement at the end of the 2016 season.
And after the Colts managed just 33 sacks total last season, Sheard should be a welcome addition as they hope to pressure quarterbacks at higher rates after they wrapped up 2016 with the lowest-graded front seven in football, according to Pro Football Focus.