An official announcement is expected Wednesday, according to USA Today.
Next year will be Ortiz's 20th in the major leagues.
Ortiz, who turns 40 on Wednesday, has spent the past 13 years with the Boston Red Sox after six years with the Minnesota Twins at the start of his career.
The popular, Dominican-born Ortiz joined the 500-home run club this past season and finished the year with 503 career homers, 1,641 RBIs and a .284 lifetime batting average. He has hit 445 of his homers since joining the Red Sox. His 447 home runs as a designated hitter are the most in history.
In 2015, Ortiz batted .273 with 37 home runs and 108 RBIs in 146 games. His home-run total was his highest since he belted a team-record 54 in 2006. Last season's numbers also were up from the previous year when he batted .263 with 35 home runs and 104 RBIs.
Ortiz, a nine-time All-Star, was named the World Series MVP in 2013 when he helped the Red Sox defeat the St. Louis Cardinals. He has been a part of three Series championships with Boston.
Ortiz's base salary for the 2016 season is $11 million, which became guaranteed in August when he reached 425 plate appearances in 2015.