Townsend makes the move to the Bombers after being delisted by Richmond at the end of the 2019 season, following a premiership with the club’s VFL side.
Townsend rose to stardom in 2017, where he played the final five matches of the season, and kicked 16 goals to help the Tigers break their premiership drought.
He has played a total of 48 AFL games across his career, with 28 of those coming at GWS between 2012-15, and 20 at Richmond over the past four seasons.
“Jacob will provide us with a really hard edge. He is a player that is really combative, and we felt that we needed these attributes in our line-up,” Essendon’s General manager of list and recruiting Adrian Dodoro told the club’s website.
“Jacob has the ability to apply pressure in our forward line, but we are also confident that he can play inside as a big-bodied midfielder.
“The focus for us was to find experienced players during this period and we believe Jacob can play a great role and have an instant impact at the club.”
Townsend will start training with the club on Thursday.