Schilling, who turns 41 next week, wrote on his Web site Tuesday that he had passed an MRI, clearing the way for a deal with a base salary of $8 million and that includes $2 million in bonuses tied to six weigh-ins.
Additional incentives include $3 million based on innings pitches and $1 million for any vote toward a Cy Young Award, Schilling wrote.
He wrote that he and his family wanted to stay in Boston.
"This is where we want our career to come to a close," he said. "This city, this team. This is where we want to retire, raise our kids, and walk away. We got it, all of it, and more."
Schilling was 9-8 with a 3.87 earned run average over 24 regular-season starts last season but he was 3-0 with a 3.00 ERA in four post-season games. That improved his lifetime post-season mark to 11-2.
He is 216-146 with a 3.46 over his 20-year career. In addition to the Red Sox, he's pitched for Baltimore, Houston Philadelphia and Arizona.