The 29-year-old split last season between Cleveland and Atlanta, going 3-0 with a 3.60 ERA in 27 relief appearances. He was released by the Indians in June but finished the season strong for the Braves, earning all three of his victories with a 0.73 ERA in 12 appearances.
Milwaukee needs bullpen help after Salomon Torres retired and Greg Gagne become a free agent.
Julio can earn an additional $950,000 in performance bonuses, including $600,000 based on games and $300,000 based on games finished.
He has a 16-33 record with a 4.30 ERA and 99 saves in eight seasons. Julio has spent time with Baltimore, the New York Mets, Arizona, Florida, Colorado, Cleveland and Atlanta. He had 83 saves for the Orioles from 2002-04, including a career-high 36 in 2003.
Julio began last season with the Indians, going a 5.60 ERA in 15 appearances. After being released on June 2, he agreed to a minor league contract with the Braves on June 14.