"It's done," seven-time Tour de France champion and former Discovery leader Lance Armstrong was quoted as saying in Wednesday's Gazzetta Dello Sport. "We've reached an agreement."
The 28-year-old Basso signed a three-year deal worth about US$6 million (Ђ4.69 million), according to the report. The deal will be formally announced later Wednesday in Austin, Texas.
"It will be official this afternoon," said Giovanni Lombardi, Basso's manager.
Basso declined comment when contacted by The Associated Press.
Basso was barred from this year's Tour de France after being implicated in a Spanish doping investigation. He was cleared last month by the Italian Olympic Committee and Italian cycling federation.
Basso left his Danish team, CSC, three weeks ago.
Discovery has been interested in Basso since before he went to CSC in 2004.
Basso finished third in the 2004 Tour de France and was second in 2005 behind Armstrong.