The one-year deal is worth a base salary of around $7 million with a maximum value of $9.6M, a source told ESPN's Field Yates.
Moncrief's career with the Colts took a turn for the worse during the 2016 season largely due to injuries. He missed 11 games over the past two seasons because of shoulder and ankle injuries after not missing any games during his first two seasons.
Moncrief, 24, had all the tools to be Indianapolis' best all-around receiver the past two seasons -- size, speed and strength -- but he continually failed to take advantage of the opportunities in front of him. He lost his starting job as the No. 2 receiver to Kamar Aiken at one point, and he finished with only 26 receptions for 391 yards and 2 touchdowns last season.
In four seasons with the Colts, Moncrief had 152 receptions for 1,875 yards and 18 touchdowns in 53 games.
ESPN's Mike Wells contributed to this report.