CBSSports.com reports that the contract would guarantee Lannan $2.5 million, with another $2.5 million in incentives.
The 28-year-old left-hander became a free agent this month after his old team, the Washington Nationals, failed to tender him a contract.
He was the Nationals' Opening Day starter as recently as 2010 but spent most of the 2012 season at Triple-A Syracuse after the Nationals signed free-agent pitcher Edwin Jackson to supplant him in their rotation shortly before spring training.
Lannan went 4-1, with a 4.13 ERA, in six starts for Washington, most of them coming late in the season after the team shut down Stephen Strasburg for the year.
He is 42-52 in a six-season career, with a 4.01 lifetime ERA. But that record is skewed by a 3-13 mark in 19 career starts against the Phillies. Against all other teams, he is 39-39 with a 3.80 ERA, and 17-15, 3.76 against the rest of the NL East.
He is viewed as the leading candidate to replace the recently traded Vance Worley as the Phillies' fifth starter next season.