Martinez has agreed to a $1 million, one-year contract with the Phillies, a person familiar with the negotiations told The Associated Press on Tuesday night.
The three-time Cy Young Award winner was in town for a physical, and the Phillies planned to hold a news conference on Wednesday.
Phillies manager Charlie Manuel, who guided the NL during a 4-3 loss in the All-Star Game, said he'd heard Phillies officials had watched Martinez throw.
"They said he was throwing much better than he was last year and that he was in tremendous shape," Manuel said after the game. "Then I also hear today that he took a physical. That's about the extent of what I've heard."
Martinez can earn up to $1.5 million in incentives. The eight-time All-Star will need to make at least a few starts in the minors before he's ready to join Philadelphia's depleted rotation.
The 37-year-old Martinez went 5-6 with a 5.61 ERA for the New York Mets last year. The free agent pitched in the World Baseball Classic before this season.
The defending World Series champion Phillies have been hurt by injuries to their starting rotation. No. 2 starter Brett Myers had hip surgery in June. Antonio Bastardo, who replaced Myers, landed on the disabled list after making five starts. The NL East leaders already have used nine starters through 86 games. They used only seven starters last season.
Martinez is 214-99 with a 2.91 ERA in 17 seasons with the Los Angeles Dodgers, Montreal, Boston and the Mets. He helped the Red Sox win the World Series in 2004.
Adding Martinez isn't expected to prevent the Phillies from pursuing All-Star Roy Halladay. The Toronto Blue Jays are actively seeking to deal the former AL Cy Young Award winner, and Philadelphia already has expressed strong interest.
Information from The Associated Press was used in this report.