Financial terms were not disclosed but sources told ESPN that Carr agreed to a deal that could potentially be worth up to $150 million and includes up to $100 million in guarantees.
Carr will receive $60 fully guaranteed at signing and another $10 million once he starts Year 3 of the deal, the sources said. He will earn $60 million in the first two years of the deal.
Carr, 31, visited New Orleans and met with several members of the organization over two days in early February. He also met again with the team last week at the NFL scouting combine in Indianapolis.
The Saints entered the offseason more than $50 million over the expected 2023 salary cap of $224.8 million but now need about $18 million to become compliant after contract restructures for several players. The next question after Carr is what they'll do with wide receiver Michael Thomas, who restructured his contract earlier in the offseason to give both sides more flexibility ahead of free agency. He remains under contract at this time.
Thomas retweeted two articles about Carr's anticipated signing Monday morning and posted "Thank you Jesus" to his timeline at the same time.
Carr declined to waive a no-trade clause in his contract and was released by the Raiders on Feb. 14 -- just before a deadline that would have guaranteed $40 million of his contract over the next two years. The release allowed him to immediately sign with any team instead of waiting until the official start of free agency.
Last season he finished with 3,522 passing yards (the third-lowest mark of his nine-year career), 24 touchdown passes, 14 interceptions (tied for the most in a single season), a 60.8% completion percentage (a career low) and an 86.3 passer rating (a career low).
Carr's history with Saints coach Dennis Allen dates to 2014, when Allen was in his third season as coach of the then-Oakland Raiders. Allen was involved with selecting Carr in the second round of the 2014 draft and made the decision to start him right away as a rookie.
Allen was fired by the Raiders just four games into the 2014 season, but Carr remained with the team for nine seasons, going 63-79 while completing 64.6% of his passes and throwing for 35,222 yards and 217 touchdowns with 99 interceptions.
"I had the opportunity to work with Derek at the start of his professional football career," Allen said Tuesday in a statement. "In addition to his talent, I admired his approach to the game, work ethic and commitment to get better every day in what were the formative stages of his career. From afar and when we played him as an opponent, I saw Derek's development into one of the most productive quarterbacks in the National Football League. Derek is an outstanding addition to the New Orleans Saints and I can't wait to get working with him and the rest of our team this offseason."
Carr made the Pro Bowl four times and helped the Raiders make the playoffs in 2016 and 2021. He stepped away from the team for the final two games of the 2022 season after being benched in what was described as a "mutual decision."
The Saints made sense as a landing spot for Carr after they went into the offseason with an uncertain future at quarterback. Andy Dalton, who started 14 games for the Saints in 2022, will be a free agent.
The Saints have Jameis Winston under contract for one more year, but Carr's signing could facilitate his release. Winston is due $12.8 million in base salary in 2023 and started only 10 games over the past two seasons after winning the starting job from Taysom Hill in 2021. Releasing Winston would save the Saints $4.4 million against the salary cap, but New Orleans would take on $11.2 million in dead money. By designating his release as a post-June 1 transaction, the Saints would save $12.8 million.
Winston tore an ACL seven games into the 2021 season and spent the rest of the year on injured reserve. He signed a new deal in 2022 after the Saints failed to acquire Deshaun Watson.
Winston fractured his back and injured a foot at the beginning of last season and was inactive in Weeks 4 and 5. He never regained his starting job.
The addition of Carr should help improve an offense that dropped into the bottom half of the league in points and total yards after the retirement of Drew Brees before the 2021 season.
ESPN's Dianna Russini and Adam Schefter contributed to this report.