At issue are provisions in the quarterback's contract that could nullify the trade. According to ESPN, Tebow's contract has a $6.2 million salary advance, of which $1.2 million already has been paid by Denver. However, the difference of $5 million is still advanced against his future salary, and that burden would shift to the Jets in a trade, but the Jets believe the Broncos should pay Tebow that money.
The trade will not be finalized until the two teams figure out who should pay the money coming to Tebow.
Tebow was expected to complement former USC quarterback Mark Sanchez, who just received a $40.5 million contract extension, with $20.5 million guaranteed.
In the deal, the Broncos would get fourth- and sixth-round draft picks in the deal, while New York gets a seventh-rounder.
Tebow polarized the nation by leading Denver to the playoffs last season. Denver executive John Elway said he and Broncos coach John Fox called Tebow on Monday night to tell him that he might be traded.
"I'm sure he was disappointed," Elway said. "He didn't come out and say he was disappointed. I think it was a typical Tim Tebow response in the fact that he was very positive, and he said, `Well, we're talking about Peyton Manning, and I understand exactly what you're doing."'
Tebow, a devout Christian, has a flock of fervent fans for reasons that have to do as much with his faith as his football skills. With his eagerness to run, he was hardly the prototypical pocket passer. But Tebow's messy mechanics and flawed footwork led to accuracy issues.
The Associated Press contributed to this report.