Schaub comes in as the presumptive starter ahead of Terrelle Pryor and Matt McGloin, who were inconsistent last year as Oakland had a second straight four-win season.
Schaub, 32, was Houston's starter from 2007 until last season, when he was benched in favor of Case Keenum after a terrible start to the year. The Texans were expected to contend for the Super Bowl last season but instead became the NFL's worst team, sinking to 2-14, which tied the worst record in franchise history.
It was clear after last season that Schaub didn't have a future in Houston, but his departure looked to be imminent Thursday night when the Texans signed veteran quarterback Ryan Fitzpatrick.
"People look at Schaub and only look at his last year," said Raiders safety Charles Woodson, who officially signed his one-year contract to return earlier in the day. "I think they base his career off of his last year. But I see a guy that, in my opinion, has been very steady. He's done some really good things throughout his time. Sometimes you just need a fresh start, a new set of circumstances to restart, to restart your history. Hopefully this is the place that he can get it done."
Along with failing in the Flynn trade, McKenzie also wasted a fourth-round draft pick on quarterback Tyler Wilson, who did not make the roster out of training camp and eventually was signed off the practice squad by Tennessee.
The move takes pressure off Oakland to use a high draft pick on a quarterback in May when Teddy Bridgewater, Blake Bortles and Johnny Manziel are all projected as first-round picks.
The Raiders pick fifth overall in the draft but could use that selection to fill another hole. The Texans might be in the market for a quarterback with the top pick.
With loads of salary cap room to start the league year, the Raiders have targeted veterans with only one of their acquisitions younger than 29.
That appears to be part of an effort to turn around the team quickly. McKenzie and coach Dennis Allen oversaw back-to-back four-win seasons since arriving in Oakland, and owner Mark Davis is running out of patience with this regime.
They are hoping last year was an aberration for Schaub.