Wojnarowski reports the contract will have a player option after the fourth year. According to ESPN's Brian Windhorst, the contract will be worth $90 million over the five years.
The 25-year-old is coming off an All-Star season where he averaged 20 points, 5.8 rebounds and 3.3 assists per game. The Bulls went 50-32 to clinch a No. 3 seed in the playoffs before losing to the Cleveland Cavaliers in the Eastern Conference semifinals. Butler was instrumental in the Bulls' rout of the Milwaukee Bucks in the first round of the playoffs with back-to-back 31 point performances.
Butler turned down a four-year contract extension worth a reported $44 million back in October. The former Marquette star went on to win the NBA's Most Improved Player Award.
Earlier in the day, the Bulls signedMike Dunleavy Jr. to a three-year contract worth $14.4 before turning their attention to Butler.
The Bulls fired head coach Tom Thibodeau on May 28 before hiring Fred Hoiberg, who Butler spoke to before agreeing to a deal.
Butler can not officially sign his new contract with the Bulls until July 9, when the NBA lifts a moratorium on player business.