According to the report, Iginla, 37, will receive a three-year deal, which will pay him $5.5 million in each of the next two seasons and $5 million in the last season of the contract.
Iginla spent last season with Boston Bruins, scoring a team-leading 30 goals and assisting on 31 others in 78 regular-season games. He also added five goals during the team's playoff run.
Iginla spent his first 16 seasons with the Calgary Flames, scoring 525 goals.
Despite recording 560 goals and 607 assists in his career, Iginla has never played on a Stanley Cup winning team. The Avalanche surprised many people last season under first-year coach Patrick Roy by going 52-22-7 and winning the Central Division.