A league source told ESPN's Adam Schefter that Ivory is expected to sign with the Jaguars on Wednesday. The move cannot be made official until 4 p.m. ET Wednesday, when the new league year begins.
Ivory, who turns 28 on March 22, set career highs with the New York Jets last season for carries (247), rushing yards (1,070), rushing touchdowns (seven) and receptions (30), showing he could contribute in the passing game.
It was the first 1,000-yard season in Ivory's career on any level, and it was good enough to lead the AFC. Ivory played in the Pro Bowl as a replacement player.
Ivory is going to be reunited with former Jets general manager John Idzik, who traded for Ivory from the New Orleans Saints in 2013. Idzik is now special assistant to Jaguars GM Dave Caldwell.
At the Pro Bowl, Ivory said the Jets wanted to re-sign him, but he suspected that cap issues could lead him to sign elsewhere.
After three seasons of wallowing on the Saints' bench, Ivory was traded to the Jets during the 2013 draft for a fourth-round pick. At the time, he signed a three-year, $6 million contract.
He got off to a great start, totaling 312 rushing yards in consecutive games against the Miami Dolphins and Washington Redskins, with a bye in between, but he started to fade around midseason. He eclipsed the 100-yard mark only once in the final 11 games.
In the season finale, Ivory, nagged by a knee injury, was replaced by seldom-used Stevan Ridley in the starting lineup and was limited to six carries.
The Jets went into the offseason with major questions at the position, with Ivory, Powell and Ridley eligible for free agency.
ESPN Jaguars reporter Mike DiRocco and Jets reporter Rich Cimini contributed to this report.