The person spoke on condition of anonymity on Monday because the Phillies had not announced the agreement.
Saunders’ deal was first reported by MLB.com. MLB Network reported Saunders has an option for 2018 worth $11 million with escalators that can make it reach $14 million, and the deal includes a $1 million buyout.
A 2016 AL All-Star with Toronto, Saunders hit a career-best 24 homers and batted .253 with 57 RBIs last season.
The left-handed hitting Saunders gives the Phillies a much-needed power threat at a spot they sorely lacked it. Peter Bourjos led Philadelphia’s corner outfielders with only five homers last year.
Saunders is projected to start in right field. The Phillies also acquired Howie Kendrick from the Dodgers earlier in the off-season to play left field. Centerfielder Odubel Herrera, an All-Star last season, signed a $30.5 million, five-year contract in December.
Saunders is coming off a difficult second half. He batted .178 with eight homers and 15 RBIs after the All-Star break.
The 30-year-old Saunders and 33-year-old Kendrick allow prospects Roman Quinn and Nick Williams more time to develop in the minors. Quinn hit .263 (15 for 57) in 15 games with the Phillies, but hasn’t played at Triple-A yet. Williams, one of several players acquired from Texas for Cole Hamels, hit .258 with 13 homers in his first season in Triple-A in 2016.