The Chiefs will receive a package of draft picks in return, according to NFL Network's Ian Rapoport.
The move cannot become official until the beginning of the new league year on March 14. The Chiefs are also waiting on the previously reported trade of quarterback Alex Smith to the Washington Redskins in exchange for cornerback Kendall Fuller and a third-round pick in the 2018 draft.
Peters, 25, was selected by the Chiefs with the 18th pick of the 2015 draft. He has 151 combined tackles, six forced fumbles, five fumble recoveries, and 19 interceptions in 45 career regular-season games. He added two interceptions in four playoff games over his three seasons in the NFL.
Peters made the Pro Bowl in 2015 and 2016, while also being named First-Team All-Pro in 2016. He graded as Pro Football Focus' No. 17 cornerback last season.
Terez A. Paylor of The Kansas City Star reports that some current Chiefs players are upset about the reported trade.
Peters will earn just over $1.7 million in base salary for the 2018 season on the final year of his rookie contract.