Nady will get a $3.3 million base salary from the Cubs, with performance bonuses that could bring his deal to $5.35 million, a source told ESPN.com's Jerry Crasnick.
After having a second Tommy John surgery on his right arm in 2009, Nady, 31, is said to be doing well on his rehab. Nady's best season came in 2008 when he batted .305 with 25 home runs and 97 RBIs for the Pittsburgh Pirates and New York Yankees.
Nady was one of 14 players with a .300 batting average and 25 home runs that season. He batted .317 against right-handers in 2008 and .262 against lefties. Over the past three seasons, Nady is a .297 hitter against right-handed pitching.
Bruce Levine covers baseball for ESPNChicago.com.