If Tillman, 30, doesn't accept the assignment to the minors, he would become a free agent.
General manager Dan Duquette told reporters Friday that the Orioles have offered the struggling Tillman an opportunity to remain in the organization and pitch at Triple-A Norfolk. Tillman is still deciding whether to accept the assignment, according to Duquette.
Tillman went 1-5 with a 10.46 ERA in seven starts for the Orioles this season. He also made six starts in the minors on an extended rehab assignment while recovering from a back injury, going 0-3 with a 6.75 ERA.
Tillman has spent his entire 10-year career with the Orioles and was an All-Star in 2013, when he went 16-7. He owns a career record of 74-60 with a 4.57 ERA in 210 games -- 205 starts -- with the Orioles.
"He did a great job for us over the years," Duquette told reporters, according to MASN Sports. "But given that we're in the rebuilding mode, we're going to give the opportunity for those innings to some younger pitchers that maybe are going to help build a more competitive team again."
To replace Tillman on the roster, Baltimore selected the contract of infielder Renato Nunez from Norfolk.