The deal also includes an opt-out, according to the source. It would be the second-largest free-agent deal in Tigers franchise history. (Prince Fielder signed a nine-year, $214 million deal with Detroit in January 2012.)
While he struck out a league-high 184 times last season, Baez hit .265 with 31 homers, 87 RBIs and 18 steals. He also brings Gold Glove defense to Detroit with his signature no-look tags.
The Tigers had been looking for a shortstop since it went 77-85 last season, finishing third in the AL Central behind Cleveland and the Chicago White Sox.
Baez was selected in the first round of the 2011 draft. The two-time National League All-Star had been close to signing a long-term extension with Chicago before the 2020 season, but the COVID-19 pandemic put negotiations on hold.
Those contract talks never resumed, and the Cubs traded Baez to the Mets this past July.
ESPN's Jesse Rogers and the Associated Press contributed to this report.