The deal will pay Yates a guaranteed salary of $5.5 million, Sportsnet's Ben Nicholson-Smith reports. He can earn an additional $4.5 million through various performance bonuses based on games pitched and awards.
Yates underwent his physical on Tuesday at the Blue Jays' spring training facility in Dunedin, Florida, according to Ken Rosenthal of The Athletic.
Yates made six relief appearances for the San Diego Padres in 2020, authoring a 12.46 ERA and 2.54 WHIP before undergoing season-ending surgery in August to have bone spurs removed from his right elbow.
The 33-year-old led MLB with 41 saves in 2019 alongside a 1.19 ERA, 1.30 FIP, and 15.0 K/9. He was named an All-Star and finished ninth in NL Cy Young voting that season.