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The Orioles are close to knocking off a big item from their offseason wish list as they have agreed to terms with free agent first baseman Derrek Lee, according to sources.

The deal is pending a physical and the terms of the deal aren't currently known, but Lee's camp has made it clear that the veteran was content with a one-year pact worth between $8 and $10 million that would allow him to improve his value in anticipation of becoming a free agent again next offseason.

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Orioles president of baseball operations Andy MacPhail declined comment.

Lee, a 35-year-old veteran of 14 big league seasons, batted .260 with 19 homers and 80 RBIs in 148 combined games for the Chicago Cubs and Atlanta Braves in 2010. However, he played all season with a torn ligament in his right thumb, an injury that he sustained on Opening Day and is believed to have contributed to his decline in power numbers.

The season before, Lee, who had surgery on the thumb early last month and is expected to be ready for spring training, batted .306 with 35 homers and 111 RBIs in 141 games for the Cubs in 2009, and finished in the top 10 in National League Most Valuable Player voting.

A two-time All-Star and a three-time Gold Glove winner, Lee is a career .282 hitter.

According to sources with knowledge of the situation, Lee was lukewarm with the idea of signing with the Orioles earlier this offseason, but the number of teams with first base vacancies has dwindled. The Orioles also appeared to be focused on signing Adam LaRoche, but talks with him reached an impasse over the free agent's insistence on a three-year deal.

Once that happened, the Orioles renewed their negotiations with Lee's agent, Casey Close.

The deal would complete the Orioles' offseason infield overhaul. They traded for third baseman Mark Reynolds, a teammate of LaRoche's last year with the Arizona Diamondbacks, shortstop J.J. Hardy and utility man Brendan Harris. They also re-signed Cesar Izturis, their starting shortstop over the past two seasons, to provide depth behind second baseman Brian Roberts, who played just 59 games last year because of a herniated disk in his back.

Once their first base vacancy is filled, the Orioles will focus on upgrading their pitching staff. They have an offer out for reliever Kevin Gregg, and they also are considering adding a left-handed reliever. Their preference also would be to add a veteran starter.

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