The deal is worth US$687,500 if Irving plays in the NHL and $207,500 if he plays in the AHL.
The 24-year-old played seven games for Calgary last season, recording his first career victory in a 3-1 win against Vancouver in December.
A native of Swan Hill, Alta., the six-foot, 175-pound Irving was 1-3-3 with a .912 save percentage and a 3.20 goals-against average for the Flames in 2011-2012.
"Leland made some great strides last season in attempting to establish himself as being ready to carry the load as the backup goaltender in Calgary," Flames general manager Jay Feaster said in a statement.
Calgary selected Irving 26th overall in the 2006 NHL draft.