The sides have hammered out the rough framework of a deal that would pay the 38-year-old Kuroda approximately $16 million, about $1 million more than he made in 2013. But talks continue on other details, the source said.
Although he appeared to tire down the stretch, going 0-6 with a 6.56 ERA in his final eight starts, Kuroda finished the season with a 3.31 ERA, the lowest among Yankees starters who qualified for the ERA title, and he topped 200 innings for the third straight season.
He told the club after the season that he needed a few weeks to decide whether he wanted to retire, go back to Japan or return to New York. But the Yankees have grown increasingly optimistic about their chances of re-signing him.
Kuroda's potential deal was earlier reported by CBSSports.com.