The deal will be worth around $70 million, sources told ESPN Deportes' Enrique Rojas, and will carry an annual average salary of $17 million, a league source told Bowden.
Tigers general manager Dave Dombrowski had said Tuesday that re-signing Martinez was the team's top priority this offseason.
Martinez, who will turn 36 on Dec. 23, had an MVP-caliber season in 2014, hitting .335 with 32 home runs, 103 RBIs and an American League-leading .409 on-base percentage.
He was paid $12 million in 2014 in the last season of a four-year, $50 million contract he signed with the Tigers before the 2011 season.
In three seasons with Detroit (he missed the 2012 season with a knee injury) he has hit .321 with 58 homers and 298 RBIs, getting the majority of his at-bats as a designated hitter.
In 12 seasons with the Indians, Red Sox and Tigers, he has a .306 batting average, 189 homers and 927 RBIs. He's been just as successful in the postseason, where he has hit .315 with 6 homers and 22 RBIs in 39 games.
The Tigers made a one-year qualifying offer of $15.3 million to Martinez for 2015, which he rejected, ensuring them draft-pick compensation if he had signed with another team.