The Bulldogs secured the key defender on Saturday, addressing a sorely needed gap in their backline. Butts, 26, fell out of favour with the Crows this season but has been guaranteed a long-term deal at Whitten Oval.
Butts played 94 games for Adelaide over eight seasons. This year he averaged 11 disposals and three intercept marks per game in nine senior appearances.
The Bulldogs' season ended last month when they were eliminated by the Crows in an elimination final.
As compensation for losing Butts, Adelaide has been awarded band-three compensation, giving them an extra second-round draft pick, currently No.33.
The signing adds to what the club hopes will be a successful off-season as they look to build a list capable of challenging for the flag.