Major league clubs faced a deadline of Tuesday night at midnight to decide whether to offer eligible players arbitration. Players have until Nov. 30 to accept.
Dunn finished second in the NL with 38 homers in 2010, his seventh consecutive season with at least that many. He also led Washington with 103 RBIs, while hitting .260 and striking out 199 times.
Dunn turned 31 two weeks ago. He has a career batting average of .250, with 354 homers and 880 RBIs.
The Nationals listened to trade offers for Dunn at the July deadline but decided not to make a deal.
Freeman hit only .167 with one homer in 24 at-bats late this past season but is regarded as the team's top power prospect.
Information from The Associated Press was used in this report.