A source close to the negotiations said Odom will come away with a guaranteed $27 million from the new contract which would match the original value of the three year $27 million deal Lakers owner Jerry Buss pulled off the table earlier this month.
Odom's agent Jeff Schwartz declined to talk discuss the specifics but did confirm that the sides have an agreement in principle.
Lakers general manager Mitch Kupchak declined comment.
But Odom has said all along that he wanted to stay in Los Angeles and has been quoted over the last year saying he would "take less money to stay in L.A."
Odom made $14 million last season. With Odom's return and the addition of Ron Artest, the Lakers now have the pieces in place to make a legitimate run for a second consecutive NBA championship.