Young, 36, had spent 13 seasons - all of his Major League career - with the Rangers, but probably would have seen his playing time reduced in 2013 with the emergence of infielders Jurickson Profar and Mike Olt.
He will be Phillies' regular third baseman after agreeing on Saturday to waive a no-trade clause in his contract.
Texas will receive reliever Josh Lindblom and minor-league pitcher Lisalverto Bonilla.
Young, the 2005 American League batting champion, hit .277 in an off season with the Rangers in 2012. He had hit .338 the previous season and has averaged over .300 seven times in his career.
He is scheduled to earn $16 million next season, with Texas expected to pay at least half of that.