The deal will become official once Gregg passes his physical.
Various reports have placed the value of the deal from $8-$10 million.
Manager Buck Showalter must choose between Gregg and Koji Uehara to be the team's closer in 2011. Gregg wanted to sign with a team that would give him that opportunity and he'll go into the camp as the early favorite.
Uehara stated last month that he didn't care whether he closed or worked in a set-up role.
The biggest concern with Gregg has been his control. He walked 30 batters and struck out 58 in 59 innings last season, and his 1.39 WHIP stings a little. But he's a proven closer with attitude - he has 121 saves over the past four seasons - and he makes the bullpen much deeper in the late innings.
The Orioles still want to add a left-hander to go with Michael Gonzalez.