The deal is for five years and $50 million, with $24 million guaranteed, sources told ESPN NFL Insider Adam Schefter. It's one of the biggest guarantees ever given to a wide receiver. The Cardinals gave Larry Fitzgerald a $30 million guarantee.
In accordance with the rules of the recent labor agreement, Holmes isn't permitted to sign the contract until Friday.
Holmes' deal is so big that it probably means the Jets can't afford to re-sign Braylon Edwards, another high-profile free agent. Edwards is coming off a strong season, but the Jets prioritized Holmes because of his speed and game-changing ability.
"It was such a luxury to have both of them last year," quarterback Mark Sanchez said Tuesday. "It's almost unrealistic to have that kind of a receiving corps again."
Jets cornerback Darrelle Revis lauded Holmes' signing.
"The guy, to me, is unbelievable as a receiver in terms of his smartness and his route running," he said. "He's a tough sucker and he's a leader. He gave a couple of speeches in our locker room this past year that shows his passion. Him and (Sanchez's) chemistry is great."
On Twitter, Holmes thanked other players who congratulated him on the deal. He also retweeted a post by fellow Jets free agent Antonio Cromartie, who said: "Congrats to (at)santonio10 on his new deal...that's what I'm talking abt. Good friend and excellent teammate."
Holmes later tweeted a photo of himself drinking from a champagne bottle, and said: "Just finish a bottle of Louis Roederer Cristal from 2002! Big bro showed love today."
Upon hearing the news, Edwards posted a message on his Twitter account: "Congrats to Santonio. A great player and great friend."
Edwards has said he'd like to stay with the Jets.
"I would love to be a Jet but the feeling doesn't seem to be mutual with the management," Edwards tweeted Wednesday.
Meanwhile, Edwards was in court in Cleveland on Wednesday. A judge spared him jail time, but extended his Ohio probation by one year for violating terms by driving drunk in New York City.
"All of my court days r behind me, thk God and I am ready to play Football," he wrote on Twitter.
If Edwards leaves, as expected, the Jets likely will look for a cheaper alternative to plug into the starting lineup, which means the Randy Moss speculation will heat up. Despite his baggage, and an awful 2010, Moss is expected to draw interest from the Jets.
They also could check in on former Giants receiver Plaxico Burress.
The Jets acquired Holmes from the Steelers in April 2010 for the modest price of a fifth-round draft pick. After several off-field incidents, the Steelers had grown tired of his act and were willing to part with him before he entered the final year of his contract. He was only a year removed from his shining moment, a game-winning, circus catch in the final moments of Super Bowl XLIII, in which he was named the MVP.
After serving a four-game suspension for violating the league's substance-abuse policy, Holmes had an immediate impact on the Jets, making huge plays in the final minute of three consecutive games in November. Even though he played only 12 games, he finished with 52 receptions for 746 yards and six touchdowns.
This move isn't without risk, however, as Holmes is one strike away from a one-year suspension by the league. The Jets may have insisted on language in the contract that allows them to recoup bonus money in the event he gets suspended again.
Rich Cimini covers the Jets for ESPNNewYork.com. Information from The Associated Press was used in this report.