Niemi joins fellow Finnish netminder Antero Niittymaki in San Jose as the replacements for longtime starter Evgeni Nabokov. Niittymaki signed a two-year, $4 million deal on the first day of free agency in July.
"We liked our goaltending as of yesterday. We like it even more today," general manager Doug Wilson said. "When a player like this comes available and he wants to come to your team, especially on a contract that we feel fits our salary structure and you don't have to give up anything to get him, you just have to make it happen."
Niemi, 27, played all but one period of the Chicago Blackhawks' run to the Stanley Cup title, going 16-6 with a 2.63 goals-against average, .910 save percentage and two shutouts.
He stopped 129-of-136 shots in the Western Conference finals to help Chicago sweep the Sharks but was allowed to leave as an unrestricted free agent last month because of salary cap concerns.
Wilson said Niemi's performance during that series was "etched in my brain." He made 44 saves to lead the Blackhawks to a 2-1 win in Game 1 in San Jose. He added 44 saves in a 3-2 overtime win in Game 3 as the Sharks never got into the series.
"He made some big saves in key times," Wilson said. "Our staff is very well aware of him. We took a look at a lot of footage not only in that series."
Wilson said Niemi and forwards Dustin Byfuglien and Dave Bolland were the biggest difference in the sweep that featured three tight games. Now Niemi and Byfuglien are among the eight players who have left Chicago since the team won its first Stanley Cup in 49 years.
Niemi was awarded a $2.75 million salary in arbitration this summer but Chicago decided to let him go instead of paying that amount. The Blackhawks went out and signed veteran Marty Turco to a $1.3 million, one-year deal instead.
Niemi had other offers but decided to take the one-year with the Sharks.
"I though for me it would be really important to go to a really good team and also a really good organization," he said. "They really wanted me there too. It wasn't too hard a decision after all."
Niemi said the four games against the Blackhawks next season will be the most "exciting" of the regular season. The teams play in San Jose on Nov. 24 and Dec. 11 and in Chicago on Dec. 30 and March 14.
The Sharks made it tougher for the Blackhawks to keep Niemi when they signed Blackhawks restricted free agent Niklas Hjalmarsson to a $14 million, four-year offer sheet in July. The Blackhawks matched the offer for the defenseman but that left them with less money available for Niemi.
Wilson said he was just looking to add players to help his team and the offer to Hjalmarsson was not part of a grand scheme to get Niemi on the open market.
"My job is to put the best team on the ice we can here in San Jose and operate within the rules like we did," Wilson said. "To connect the two, I'll leave that up to other people to speculate or make comments."
Nabokov was the Sharks' starting goalie for most of the past decade, averaging more than 60 starts a season since his first full year in 2000-01. But the Sharks decided not to try to re-sign him because Wilson believes high-priced starting goalies are unnecessary luxuries in the NHL's salary cap era.
Now they have a pair of potential starting goalies in Niemi and Niittymaki, along with last year's backup, Thomas Greiss. Wilson said he has talked to both Niittymaki and Greiss and that coach Todd McLellan will decide how to split up the playing time.
Niittymaki spent last season with the Lightning after playing four full NHL seasons with the Philadelphia Flyers. He went 21-18-5 with a 2.87 GAA last year.
Niemi has played in just 42 regular-season games in his career but showed he can carry a team in the playoffs. He took over as Chicago's top goalie last year, going 26-7-4 with seven shutouts, a 2.25 GAA and .912 save percentage in 39 games.