The deal is for five years, $139 million-plus, according to The Vertical.
DeRozan expressed a desire to return to Toronto after the Raptors were eliminated from the playoffs, and a source told ESPN's Tim MacMahon in late June that the shooting guard was focused on re-signing with the team, rather than setting up meetings with others once free agency started.
Toronto general manager Masai Ujiri also said retaining the veteran swingman was the team's No. 1 goal.
The two-time All-Star averaged 23.5 points per game during the regular season in 2015-16. He has played his entire career with the Raptors, who selected him No. 9 overall in the 2009 NBA draft.
DeRozan, 28, grew up in Los Angeles and attended Compton High School and USC. Toronto is coming off its most successful season, in which it advanced to the Eastern Conference finals for the first time in franchise history.
Information from ESPN's Mike Mazzeo was used in this report.