The Russian League team Avangard Omsk announced the signing of the 36-year-old Czech winger on its Web site Friday.
"It was the toughest decision in my life, hockeywise. ... No question about it. I hate making changes," Jagr told The Canadian Press.
Jagr's agent, Pat Brisson, confirmed the signing in an e-mail. He and Jagr, as well the team, wouldn't comment on contract terms. However, the deal is believed to be for two years plus an option for a third, and will pay Jagr about $7 million tax-free -- the equivalent of about $11 million a season in the NHL.
Sources told ESPN.com on Friday that Jagr has a "no-out" clause, locking him into staying in Russia for the length of the deal -- at least two years, with a third possible year, at Jagr's discretion.
"It was a very difficult but personal decision to make in light of the many NHL teams interested in his services," Brisson said. "He is grateful to the NHL and especially the Rangers in recent years."
Jagr enjoyed his experience in Omsk during the lockout.
"Don't forget I'm from Europe," Jagr told the Canadian Press. "Russia is nothing new for me. It's close to the Czech Republic. It would be different for American or Canadian players. But for me, I enjoy it. The people love hockey and I had a great time out there."
Pittsburgh, Edmonton and the Rangers are believed to have had the most interest in Jagr. All offered one-year deals.
"I want to thank all the teams that still believed in me and still made an offer," Jagr said. "Edmonton was probably the biggest offer I got. It was a great offer, to be honest with you."
Jagr had long been reported to be considering lucrative offers from Russia. Rangers general manager Glen Sather grew impatient waiting for serious negotiations with Jagr's side and went in another direction Thursday, signing former Vancouver Canucks captain Markus Naslund and making Jagr's return unlikely.
"I'm thankful for the three years I had in New York," Jagr said. "They were great years. I understand that I'm older and the team decided to go in a different direction because they couldn't get the deal done."
If Jagr had reached 84 points or won a major NHL award this season, his expiring contract would have been automatically extended for one year.
He just missed being league MVP two years ago when he was the runner-up after breaking Rangers records for goals (54) and points (123) in a season.
Though Jagr finished with 71 points this past season, his inspired play over the final weeks of the regular season and his five-goal, 10-assist outburst in 10 postseason games showed he has plenty of game left.
The Rangers reached the playoffs each of the last three seasons -- the past two with Jagr as captain -- but didn't get past the second round.
After the Rangers' season ended, Jagr indicated he planned to eventually return to the Czech Republic to play for his hometown club in Kladno.
"I don't think I would sign longer than two years, just because of my dad," Jagr said in May. "He asked me to come home in two years. He's helping to build a new arena there and he wants me to be there."
Jagr noted that this might not be the last time he plays in North America, pointing toward the Winter Olympics in two years.
"Maybe," he told the Canadian Press, "I will see you in Vancouver in 2010."