The deal includes $5 million in guarantees, the source said. There are incentives in this contract that could make it worth $15 million over three years, according to the source.
The 6-foot-3, 217-pound Nelson has emerged as one of Green Bay's top wideouts. In four games, he has 15 catches and a 19.2 yards-per-catch average.
The contract will pay Nelson an average of $4.8 million in each of the first two years, according to the source.
The source said Nelson's deal runs through the 2014 season.
John Clayton a senior NFL writer for ESPN.com.