The person spoke on condition of anonymity because the deal will not be completed until Guerrero passes a physical.
A second person with knowledge of the deal, also speaking on condition of anonymity because it wasn’t final, said the agreement was worth $8 million.
Guerrero has 436 homers and 1,433 RBIs in 15 major league seasons.
The 36-year-old hit .300 with 29 homers and 115 RBIs with the AL champion Texas Rangers last season and almost certainly will become Baltimore’s designated hitter.
If he passes the physical, he would be the marquee offseason acquisition by the Orioles, who have added several newcomers in their bid to end a run of 13 consecutive losing seasons.
President of baseball operations Andy MacPhail has added through trade or free agency third baseman Mark Reynolds, shortstop J.J. Hardy, first baseman Derrek Lee, closer Kevin Gregg and starter Justin Duchscherer.
Guerrero provides Baltimore with a bonafide cleanup hitter.
Guerrero has a .320 career batting average and has scored 1,268 runs in 2,002 games. He broke into the major leagues with the Montreal Expos and played six seasons with the Angels before joining the Rangers in 2010.
Luke Scott, who led the Orioles with 27 homers last season, most likely will be moved from designated hitter to left field.
AP freelance writer Dionisio Soldevila contributed to this report.