The deal is worth $60 million, sources told ESPN's Jeff Passan. Taylor will be paid $15 million in 2022 and '23, then $13 million in '24 and '25. His club option for 2026 is for $12 million with a $4 million buyout.
Taylor, 31, earned his first All-Star selection with the Dodgers in 2021, hitting .254 with 20 home runs, 73 RBIs and 13 steals. He saw the majority of his playing time as a center fielder and at second base, but he also saw action at the other outfield positions as well as shortstop and third base.
He long has been revered by his Dodgers teammates and coaches for his defensive versatility, offensive approach and quiet professionalism. Since the start of the 2017 season, Taylor has appeared in 88% of the Dodgers' games, has played six positions, has batted .265/.343/.461 and has accumulated 14.1 FanGraphs wins above replacement.
Taylor's option price would increase by $3 million if traded before the end of the 2023 season, by $2 milliion if traded after the 2023 season and before the end of the 2024 season or by $1 million if traded after the 2024 season and before the start of the 2026 season. It also would increase by $1 million if he has 525 plate appearances in 2025 or is an All-Star or wins a Silver Slugger award that year.
He would receive a $2 million assignment bonus each time he is traded.
Taylor had received a qualifying offer worth $18.4 million for one year, but he turned it down to enter free agency.
Taylor battled a neck injury down the stretch and struggled his way out of the lineup at the start of October, but he made a huge impact in the postseason for the Dodgers, coming off the bench in the National League Wild Card Game to hit a two-out, two-run walk-off home run against the St. Louis Cardinals. He followed that with three home runs in an 11-2 victory against the Atlanta Braves in Game 5 of the National League Championship Series. His 13 total bases in that game set a Dodgers postseason franchise record.
He was the co-NLCS MVP in 2017 and also a key contributor when the Dodgers won the World Series in 2020.
After breaking into the majors with the Seattle Mariners in 2014, Taylor was traded to the Dodgers in 2016. In his six-plus seasons in Los Angeles, he hit .264.
Los Angeles designated infielder Sheldon Neuse for assignment to clear space for Taylor on the 40-man roster.
ESPN's Alden Gonzalez and The Associated Press contributed to this report.