The report said the deal should be announced prior to the start of spring training, although baseball's official website said a source within the Seattle organization indicated there were no plans to make such an announcement.
If such a contract is signed, Hernandez would become the highest-paid pitcher in baseball history. He has two years remaining on his current contract.
Hernandez went 13-9 with a 3.06 ERA last season and struck out 223 batters. His season was capped by a perfect game against Tampa Bay.
He has spent his entire eight-year career with Seattle and has traditionally been a victim of sparse run support. Hernandez won the Cy Young Award in 2010 with only a 13-12 record. He posted a 2.27 ERA that year.
In his 238 career starts he has recorded a 98-76 record. He will turn 27 in April.