Peyton Manning picks Broncos

Peyton Manning will become the next quarterback of the Denver Broncos, barring a snag during intensified contract negotiations that have commenced under the instruction of the four-time MVP to his agent Tom Condon, according to multiple sources.

Once the Manning deal becomes official, Denver will try to trade Tim Tebow, according to sources.

Manning called Broncos vice president of football operations John Elway on Monday morning to tell him the news. Manning also called the San Francisco 49ers and Tennessee Titans to inform them of his intent to now play for Denver.

Manning instructed Condon to negotiate the finite details of a contract that would conclude with him joining the Broncos after a frenzied but focused process that began when the Indianapolis Colts released him March 7.

The Broncos won't comment on Manning's decision until they have a formal agreement in principle, but as of late Monday night the sides were in the process of finalizing a deal, according to sources. The team plans to introduce Manning at a new conference Tuesday afternoon at their Dove Valley facility in Englewood, CO, a team source added.

The Broncos have tentatively scheduled a news conference for 3 p.m. ET on Tuesday.

Elway and Manning first discussed the parameters of a five-year, $95 million contract during their March 9 meeting in Denver, the first time the quarterback visited a team during his free agency.

Elway then told Manning during last Friday's trip to Durham, N.C. -- where the quarterback has done the majority of his training -- that he wanted to finalize a contract "fair to both sides." Neither side expects any hangups.

However, details such as guaranteed money, structure of the deal and contract language designed to protect the Broncos in the event of Manning's inability to perform due to his prior neck surgeries all will be addressed in the contract, sources said.

Yet the Broncos have few concerns with Manning's medical condition. He already passed the physical exam that a team of Broncos doctors administered during the visit to Durham, a development that Elway informed Manning of when he returned home to Denver that night.

Manning also passed physical exams by San Francisco and Tennessee but he has told all teams that he still has gains to achieve in terms of arm strength and endurance that are related to nerve regeneration due to his neck injury. Nevertheless, his throwing sessions observed by all three teams -- combined with extensive video of previous workouts -- were satisfactory enough for those teams to pursue the most celebrated available player since the NFL's free agency era began in 1993.

"I think it's a great place for him," Broncos defensive end Robert Ayers said outside the Broncos' complex. "I don't think he made a bad decision. I think he made a great decision. Hopefully we can prove him right and hopefully we can win a lot of games here."

Elway now has helped produce Denver's biggest win since he led the Broncos to their last Super Bowl win in January 1999. Elway and Manning have stayed in close contact throughout this process, strengthening a relationship that grew well beyond the golf the two had played together in the past.

Manning is comfortable enough with Denver that he has directed Condon not to negotiate with the 49ers and Titans to avoid any perception that he was seeking financial leverage, sources said.

Only an unforeseen significant obstacle that would develop during the final stages of negotiations would prevent Manning from signing with the Broncos, sources said.

Titans owner Bud Adams released a statement Monday saying: "Obviously I am disappointed, because I thought we would be a perfect fit.

"Now that we move forward, I want our fans to know that our expectations haven't changed -- winning a championship is still the goal. I like our quarterback situation moving forward and we will continue to build the team through free agency and the draft with that goal in mind.

"I also want to commend Matt Hasselbeck and Jake Locker. They were thrown into a very difficult situation. Matt was very good for us last year; and at some point, we expect Jake to be our future franchise quarterback," Adams said in the statement.

49ers CEO Jed York wished Manning well and said he would like to have former No. 1 overall pick Alex Smith back at quarterback.

"We have a contract on the table and it's up to (Alex)," York told CSNBayArea.com. "We'd like for him to be here, and we'll see where it goes."

Smith, perhaps irritated by the 49ers' interest in Manning, visited with the Miami Dolphins over the weekend. York said he hopes Smith is the 49ers' starting quarterback next season.

"I trust (coach) Jim (Harbaugh) and (general manager) Trent (Baalke) to figure it out," York told the website.

Several Broncos players, including running back Willis McGahee and defensive end Elvis Dumervil, celebrated the news on Twitter.

"To all my free agents across the nfl, I think u know what time it is. It's about to go down...," McGahee wrote.

And Dumervil's tweet included "What a power move!"

Not all Twitter reaction was positive, however. NFL Network analyst Deion Sanders tweeted that Manning should have picked the 49ers instead.

"Manning to Broncos!! Bad move just my opinion. Outside no dome very cold winters inexperienced receivers. I would have chose 49ers. Oh I did," he wrote. Sanders played for the 49ers in 1994.

"Think! Do u go to the Team that went 2 the NFC championship with great defense ,running game n Moss or Denver?"

Once the contract is completed, Manning will travel to Denver for a news conference to formally introduce him. Shortly thereafter, Manning will be allowed to work with the team's trainers, strength and medical staffs because of his prior neck surgery.

While Manning soon will arrive in Denver, Tebow could well depart. According to sources, Denver will try to trade Tebow -- who led the team to an 8-8 finish, an AFC West title and a first-round playoff victory over the Pittsburgh Steelers.

"I wouldn't say I feel bad for him," Ayers said. "It's a business. And I'm pretty sure Tim understands that. ... We wish him luck, no matter what he does. I hope he's here. He's a great leader, a great locker room guy."

Colorado Gov. John Hickenlooper also chimed in, saying he hoped Tebow wasn't going anywhere.

"He's a young man, right? And a year or two of working under John Elway and Peyton Manning, you know, I'm not sure any other quarterbacks around the country get that opportunity," Hickenlooper said.

Manning's arrival will set in motion a string of personnel moves for the Broncos. Denver has had a free-agent plan strictly for if the team was able to sign Manning. The two sides now will pursue other players to bolster the roster, some of whom will be familiar to Manning.

One interesting player is former Colts center Jeff Saturday, whom Manning has always endorsed as invaluable to his own performance. A source said discussions related to Saturday, who was Manning's center with the Colts for 12 years, involved evaluations by all three teams' personnel and coaching staffs on whether he would be a logical fit. However, Manning did not mandate that he and Saturday would have to be a package deal, sources said.

Saturday was supposed to visit the Green Bay Packers and Tennessee, but Denver will have great allure due to Manning's arrival, whenever it becomes official.

Linebacker Joe Mays, who re-signed with the Broncos for three years and $12 million, said he was even more thrilled to return to Denver after the Manning news.

"Aw man, it's going to be exciting just what he brings to a team, he brings his leadership, just the way he approaches the game," said Mays, who canceled a trip to visit with the Colts on Sunday, "He has the 'it' factor when it comes to winning games. He had it over his time with the Colts and now he's got a chance to do it here. We're all excited to have him on the team."

Under terms of the new collective bargaining agreement, Manning is not allowed to engage in classroom football discussions with the coaching staff until April 16.

He will not be allowed to use the team's football field under the supervision and instruction of the coaching staff until May 2. Any throwing sessions under the supervision of trainers that are considered part of his rehab may not involve current Broncos receivers until April 16. He can throw independently with Denver receivers without coaching supervision or instruction but it must be away from the facility until the allowable voluntary window opens per the CBA.

The Broncos have retired jersey No. 18 but the only player to ever wear that number for Denver said last week that he wanted to make it available for Manning. Frank Tripucka wore No. 18 for three seasons in the 1960s, when he was the first quarterback in team history. After his tenure, the number was ceremonially retired.

But Tripucka is just fine with breaking it out of storage. The
84-year-old Tripucka said in a phone interview that if Manning
wants that number, "He should have it. Let's give it to him."

Chris Mortensen is ESPN's senior NFL analyst. Adam Schefter is ESPN's NFL Insider. Information from The Associated Press was used in this report.