ESPN's Michael Smith first reported the story.
The Patriots might keep him if they have doubts that Tom Brady will be ready for the start of next season after sustaining a serious knee injury in the 2008 opener. If they're confident Brady will be ready, they could trade Cassel rather than pay him the $14.65 million offer for 2009 in the franchise designation.
Cassel had a breakout season in 2008, starting 15 games after starting none the seven previous seasons -- four with Southern California as backup to Heisman Trophy winners Carson Palmer and Matt Leinart, and three after New England drafted him in the seventh round in 2005.
For now, he remains a free agent, but the Patriots can match any offer made by another team or allow him to sign with that team in exchange for two first-round draft picks. The franchise tag value is the average of the top five paid NFL players at a particular position.
If and when Cassel signs the one-year designation, he will be under contract to the Patriots and could be dealt.
"Matt has been a pleasure to coach his entire career and last season in particular, when his years of hard work and commitment resulted in a most impressive performance," Patriots coach Bill Belichick said in a statement. "We look forward to working with Matt again in 2009."
David Dunn, Cassel's agent, did not return a phone call seeking comment.
Cassel's stock soared after he took over for Brady and helped the Patriots to an 11-5 record, but New England missed the playoffs.
Brady, who led the Patriots to an unbeaten regular season in 2007 and their fourth Super Bowl in eight years, went to the turf midway through the first quarter on Sept. 7 after being hit in the backfield by Kansas City safety Bernard Pollard. The two-time Super Bowl MVP had started 128 games and was replaced by Cassel, who helped the Patriots to a 17-10 win.
Brady underwent surgery for torn ligaments on Oct. 6, then had follow-up surgery to treat a postoperative infection.
On Jan. 21, he said in an interview that his rehabilitation was "going really well," but he did not offer a timetable for a return to the field. He made his comments on Toronto sports radio station The Fan 590. Brady was not asked during the interview if he expected to be ready for training camp or the start of the regular season.
Teams are allowed to place the franchise tag on one player per season. Without it, Cassel would have become an unrestricted free agent Feb. 27 and been able to sign with any team without compensation to the Patriots. The period in which a team can designate a franchise player is Feb. 5-19.
Last season, Cassel finished with 327 completions in 516 attempts (63.4 percent) for 3,693 yards, 21 touchdowns and 11 interceptions. The yardage was the fourth most in the AFC and the completion percentage was the third best in team history.
If the Patriots keep Brady and Cassel, they would have two quarterbacks taking up nearly 25 percent of the team's salary cap of $123 million for 2009. Brady's cap charge will be $14.62 million, although his actual salary for the year is $5 million with a $3 million bonus for making the roster.
Cassel is the fifth player in Patriots history to be designated a franchise player. The others were kicker Adam Vinatieri in 2002 and 2005, defensive back Tebucky Jones in 2003 and cornerback Asante Samuel in 2007. The Patriots waited until the last day to place the tag on all but Samuel, doing it six days earlier.
In 2002, the Patriots lifted the tag after they reached a multiyear agreement with Vinatieri. But he played under the tag in 2005, then left as a free agent for Indianapolis. In 2003, the Patriots traded Jones to New Orleans for three draft picks.
In 2007, Samuel held out of training camp until the Patriots agreed not to apply the tag to him again in 2008 if he played in 60 percent of the defensive snaps or they won 12 games. Both conditions were met and he left after the 2007 season for Philadelphia as a free agent.
ESPN's Michael Smith and The Associated Press contributed to this report.