The deal includes $750,000 in incentives, a source told ESPNdeportes.com.
The 33-year-old will likely be Baltimore's primary designated hitter, according to Stark.
Cruz played only 109 games for the Rangers last season before serving a 50-game suspension for his involvement in the Biogenesis scandal, but still hit .266 with 27 homers and 76 RBIs.
Cruz played the last eight seasons with Texas and was an All Star in 2009 and 2013. He hit 157 home runs for the Rangers, including 135 the last five seasons.
Because he turned down a one-year, $14.1 million qualifying offer from the Rangers, Baltimore had to sacrifice a draft pick to sign him. But the Orioles already lost their first-round choice after signing starter Ubaldo Jimenez, so they only had to give up their second-round pick (No. 55 overall) to sign Cruz, according to Stark.
Cruz is one of seven right-handed hitters who've hit at least 20 home runs in each of the last five seasons — the others being Miguel Cabrera, Alfonso Soriano, Matt Holliday, Mike Napoli, Mark Reynolds and Hunter Pence — according to Stark. SI WIRE: Dodgers paying attention to Yasiel Puig's weight