In a post on his Twitter account Tuesday night, Driver said, "When I said I will be a Packer for life. It is now true. Packer for life."
Driver's new deal with the Packers is for one year worth $2.5 million with $500,000 up front, a league source told ESPN.com's Andrew Brandt on Wednesday.
Driver has a year left on his contract, but his return to the team was not considered likely unless he restructured his deal. Driver's agent, Jordan Woy, confirmed to WTMJ-TV in Milwaukee that an agreement has been reached.
"We have agreed to terms with the Packers but need to review it tomorrow to finalize," he wrote in an email to the NBC affiliate, as reported by ESPNMilwaukee.com.
Driver is the team's all-time leader with 735 catches for 10,060 yards. He said after the Packers' playoff loss to the New York Giants that he wasn't sure if the team would bring him back.
Driver won ABC's "Dancing With the Stars" last week.
Information from The Associated Press was used in this report.