Wood's physical was scheduled for Thursday, a baseball official familiar with the arrangements said, speaking on condition of anonymity because the deal was not final. His contract would include an option for 2011.
Wood had 34 saves last season for Chicago Cubs, then became a free agent. The 30-year-old right-hander has had a long history of injuries and moved from Chicago's starting rotation to the bullpen in 2007.
He lives in Arizona and could train the at the Indians' new facility in Goodyear.