NEW ORLEANS -- The Chicago Bears will have to search elsewhere for a new tight end.
ESPN NFL Insider Adam Caplan reported earlier this week that the deal is worth up to $7.5 million over three years, with $3.25 million guaranteed.
The Saints' decision was only mildly surprising. They are tight on salary-cap space and have already signed tight ends Coby Fleener and Michael Hoomanawanui this offseason, but they have valued Hill for his versatility as a pass catcher, a blocker and a core special teams player since he signed as an undrafted rookie out of Idaho State in 2013.
The 6-foot-5, 250-pound tight end has 36 receptions for 340 yards and eight touchdowns over three seasons. Five of those TDs came as the third-string tight end in 2014, which led many to expect a breakout for him last season after Jimmy Graham was traded to the Seattle Seahawks. Instead, Hill remained a minor part of the offense; veteran Benjamin Watson had the breakout season.
This season, Fleener will likely emerge as a leading man.
The Saints were down to less than $300,000 in salary-cap space as of Friday morning, a total that excluded recent deals with linebacker Craig Robertson and safety Jamarca Sanford because they have not been processed yet.
The Saints are also in strong contention to sign free-agent defensive tackle Nick Fairley, which would require them to carve out more cap space.
Hill is already on the books for $1.67 million, since the Saints offered him that much on a one-year qualifying deal earlier this month. It's unclear if the new contract carries a larger or smaller cap figure for 2016.
The Bears still have a need at tight end after trading Martellus Bennett to the New England Patriots. Newly re-signed Zach Miller is the favorite to start in 2016, but Chicago wants to strengthen its depth at the position. The Bears also brought back Rob Housler on a one-year deal and traded for Khari Lee last summer.
ESPN Bears reporter Jeff Dickerson contributed to this report.