The left-hander finished seventh last season in the American League with 31 saves despite a nearly one-month stint on the disabled list with shoulder inflammation, closing out only one game after July 27.
"It's a big relief," Sherrill said Friday night, according to MLB.com. "It's good to get it behind us, and we leave Sunday, so it's good to have peace of mind and take that flight to Florida and start throwing bullpens when we get there."
The Orioles' spring-training reporting day for pitchers and catchers is Feb. 14.
Sherrill, 31, had asked for $3.4 million, with the Orioles offering $2.2 million. He made $980,000 last year, when he pitched a career-high 53 1/3 innings with a 4.73 ERA.
Sherrill spent the first four seasons of his big-league career with the Seattle Mariners before a February 2008 trade with the Orioles.