Wood left the Cubs in 2009, signing a two-year, $20 million deal with the Indians. He was traded to the Yankees on July 31. He was the primary setup man for Mariano Rivera for the rest of the season.
Wood and his family have moved back to Chicago full time and are selling their home in Arizona in order to send their young children to schools in Chicago, according to a Wood family member.
The deal is not done yet, but, the source said, it's moving in a direction that would have Wood returning to the Cubs. The deal is likely to be longer than one year.
Wood originally signed with the Cubs in 1995. He was selected by the team with the fourth overall pick in that year's draft.
After striking out 20 Houston Astros as a rookie on May 17, 1998, he was given the name "Kid K" by Cubs loyalists. Wood's best season as a starter was 2003, when he posted a 14-11 record and struck out a National League-high 266 hitters.
After three injury-plagued seasons in the rotation, Wood became a relief pitcher for the Cubs and then their closer in 2008. That year, he saved 34 games for a team that won the NL Central.
Wood won two playoff games against the Atlanta Braves in the 2003 NLDS only to have a reverse performance in the NLCS. He was the losing pitcher in Game 7 of that series, which sent the Marlins to the World Series.
Wood has been on the DL almost every season since 2004. He missed six weeks of the 2010 season with a back injury.
Wood has an 83-68 record with 62 saves and a 3.65 ERA during his 11 big league seasons.
Bruce Levine covers baseball for ESPNChicago.com.