Durbin received a guaranteed base salary of $800,000 and can make an additional $1 million in reachable incentives, a baseball source told ESPN.com's Jerry Crasnick.
Durbin spent the past three seasons with Philadelphia. He said Tuesday that he drew interest from 22 teams, but decided to return to the Indians because they have at least two openings in their bullpen.
Durbin was with Cleveland in 2003 and 2004 before playing for Arizona, Detroit and the Phillies.
The 33-year-old went 4-1 with a 3.80 ERA last season for the NL East champions. He appeared in 15 postseason games the past three years.
Durbin, who has a 36-44 career mark in 308 games, is excited about joining a young Indians team he believes has potential to contend.
The Indians may also be looking to add a bat to the roster.
Cleveland is close to signing the oft-injured Nick Johnson, a person familiar with the negotiations told The Associated Press.
The 32-year-old Johnson, who played in just 24 games last season with the New York Yankees, could be signed in the next few days by the Indians, said the person who spoke to The AP on condition of anonymity because the sides still have several details to work through.
FOX Sports first reported the Indians' potential deal with Johnson.
Johnson has always been a productive player. His problem has been staying on the field.
He's only appeared in more than 100 games four times over the past eight seasons. Johnson's long list of injuries include strains, fractures and bruises. He missed the entire 2007 season after breaking his leg with the Washington Nationals. The past few seasons, he has been slowed by wrist injuries.
Johnson does have a history with Indians manager Manny Acta. The two were together in Washington.
"He's a very good player," said Acta, who insisted he knew nothing about the club's interest in Johnson.
Information from The Associated Press was used in this report.