A source told MLB.com that the National League West franchise agreed to a 10-year, $300 million contract with the slugger. The deal represents the biggest free-agent contract in American sports history.
Sources told Yahoo Sports that the Padres can opt out of Machado's deal after the fifth year.
Machado, 26, hit .297 with 37 home runs and 107 RBIs in 162 games in 2018 between stints with the Baltimore Orioles and Los Angeles Dodgers. The four-time All-Star began the season with the Orioles before being traded to the Dodgers in July.
Machado made $16 million in 2018. The third baseman and shortstop owns a .282 career batting average and has 175 home runs in his seven Major League Baseball seasons.
The Padres met with Machado and fellow free agent star Bryce Harper this offseason before opting to sign the former Dodgers star. Harper remains a free agent and is expected to command an even larger contract than Machado's $300 million pact.