The defending NBA champions need front-court depth after center Andrew Bogut suffered a fractured tibia in his left leg just 58 seconds into his Cleveland debut last Monday night against the Miami Heat.
Sanders, 28, was in Cleveland on Monday to take a physical. The Cavs plan to waive Bogut to create a roster spot, sources told ESPN.
Sanders' deal will cover the remainder of this season and likely include a guarantee trigger date for 2017-18, sources told The Vertical.
The 6-foot-11, 230-pound Sanders is attempting a comeback after walking away from the NBA two years ago. He violated the NBA's drug policy four times with positive marijuana tests, and after leaving the NBA, he checked himself into a hospital for anxiety and depression.
The Milwaukee Bucks drafted Sanders with the 15th overall pick in 2010. He spent five seasons with the Bucks (2010-11 to 2014-15), averaging 6.5 points, 5.8 rebounds and 1.8 blocks per game. His best season came in 2012-13, when he averaged 9.8 points, 9.5 rebounds and 2.8 blocks.
LeBron James would welcome Sanders making his comeback with the Cavs.
"With his hiatus, I don't know what he was going through so I can't comment about somebody's personal life because I wasn't a part of it," James said Saturday, via Cleveland.com. "But it looks like he wants another opportunity and hopefully if we're the team, hopefully we give him an opportunity. Why not?
"Everyone deserves a second chance and it looks like he wants to get back to playing the game he loves and hopefully this is his destination. You don't know how much you can get out of a guy that's been out so long, but I'd love to see it. Why not?"