The deal reportedly contains a pair of opt-outs for the star outfielder/designated hitter, one of which is available to Martinez after two years and $50 million, according to Jon Heyman of FanRag Sports.
The Arizona Diamondbacks were the other suitor linked to the 30-year-old slugger. Martinez spent the second half of 2017 with the Diamondbacks, setting a franchise record with 16 home runs in September.
Between the Detroit Tigers and Diamondbacks last year, Martinez slashed .303/.376/.690 with 45 home runs over 119 games.
The deal is likely to push the Red Sox above the first luxury tax threshold. They're already entering the 2018 campaign with $205.5 million in projected salary commitments. Under the CBA ratified last winter, the first luxury tax penalties occur at a payroll of $197 million for the 2018 season, with the penalty increasing at $217 million and $237 million.