The deal would make Hernandez the highest-paid pitcher in baseball history.
Hernandez, 26, was scheduled to make $19.5 million this season and $20 million in 2014. The new contract will start this season, according to USA Today Sports, and pay the three-time All-Star an annual average salary of $25 million.
The 2010 American League Cy Young Award winner, Hernandez went 13-9 with a 3.06 ERA and 223 strikeouts last season. He has pitched at least 232 innings in each of the last four seasons and owns a career record of 98-76 with a 3.22 ERA in eight years, all with the Mariners.