The slugging designated hitter came to terms with the team for $8 million, a person with knowledge of the situation told The Associated Press on Friday.
The person spoke on condition of anonymity because the deal will not be completed until Guerrero passes a physical.
Guerrero has 436 homers and 1,433 RBIs in 15 major league seasons.
The 36-year-old hit .300 with 29 homers and 115 RBIs with the Rangers last season and almost certainly will become Baltimore's designated hitter.
If he passes the physical, he would be the marquee off-season acquisition by the Orioles, who have added several newcomers in their bid to end a run of 13 consecutive losing seasons.
President of baseball operations Andy MacPhail has added through trade or free agency third baseman Mark Reynolds, shortstop J.J. Hardy, first baseman Derrek Lee, closer Kevin Gregg and starter Justin Duchscherer.
Guerrero provides Baltimore with a bonafide cleanup hitter.
Guerrero has a .320 career batting average and has scored 1,268 runs in 2,002 games.
He broke into the major leagues with the Montreal Expos and played six seasons with the Angels before joining the Rangers in 2010.
Luke Scott, who led the Orioles with 27 homers last season, most likely will be moved from designated hitter to left field.
Based on reporting by the Associated Press.