Marshall is scheduled to meet with management on Tuesday and sign a contract by week's end, according to the Philadelphia Daily News. The deal is likely to be for $1.26 million, the veterans' minimum for players with at least 10 years' experience in the league.
The 6-foot-9 Marshall averaged 11.4 points and 6.8 rebounds in 11 seasons and tied the NBA record for 3-pointers in a game with 12 against the Sixers in 2005.
"Donyell Marshall has proven time and time again his value as a player in this league," 76ers president Ed Stefanski said. "We believe his ability to stretch defenses with his perimeter shooting will prove to be a great asset for our team and we look forward to having him back home in Philadelphia."
Marshall wanted to get a deal done with his home state franchise, his agent, Andy Miller, told the Daily News. Marshall starred at Reading High School in the early 1990s.
"I said 'OK, we'll see if we can get something done,'" Miller said, according to the Daily News. "But I also said we should talk about contingencies in case it didn't work out. He said he didn't want to talk about contingencies, that he wanted to hear a yes or a no from the Sixers first."
Marshall was the fourth overall pick in the 1994 NBA draft by Minnesota. He started last season with Cleveland before being sent to Seattle in a three-team trade in February. Seattle, now Oklahoma City, waived Marshall in August.
The Sixers have been busy this summer after reaching the playoffs for the first time in three years. They signed two-time All-Star forward Elton Brand; added free-agent guards Royal Ivey and Kareem Rush and free-agent center Theo Ratliff; and re-signed two of their most important players to long-term contracts, guard Louis Williams and forward Andre Iguodala.
Information from The Associated Press was used in this report.