A person with knowledge of the deal told the Associated Press on Thursday that Nowitzki would get a three-year contract worth roughly $30 million.
New contracts can't be signed until next Thursday.
The 36-year-old Nowitzki is taking a big pay cut with a contract similar in value and structure to the one Tim Duncan signed with San Antonio two years ago.
Nowitzki just completed a four-year deal worth $80 million, and he left money on the table in that deal hoping the Mavericks could get some pieces around him.
The pursuit of other stars is even more urgent with Nowitzki getting close to the end of what figures to be a Hall of Fame career. The 2011 NBA Finals MVP put off finalizing the deal until after the Mavericks met with free agent Carmelo Anthony, which happened Wednesday night.
Mavericks owner Mark Cuban recently acknowledged that he couldn't offer Anthony a max contract, so Dallas figures to be stressing the 2011 title led by Coach Rick Carlisle, Nowitzki and center Tyson Chandler, who recently rejoined the team in a trade with the New York Knicks.
If the Mavericks miss out on Anthony, there are a number of other small forwards on their wish list, topped by Houston's Chandler Parsons. He is a restricted free agent, and the Rockets can match any offer.
Dallas also wants to re-sign point guard Devin Harris, and will target several others at that position if Harris goes elsewhere.
Mills has surgery
A person with knowledge of the details says San Antonio guard Patty Mills has had surgery to repair a torn rotator cuff in his right shoulder.
The procedure was done Thursday in Dallas. There is no timetable for Mills' return.
Despite his injury, Mills has agreed to re-sign on a multiyear deal with the Spurs, according to reports. Mills emerged as a valuable backup to Tony Parker this past season and scored 17 points in the Spurs' Game 5 victory over the Miami Heat in the NBA Finals that gave San Antonio its fifth championship.
Larry Drew said Thursday that his firing as the Milwaukee Bucks' coach came as a surprise, but he accepts the decision by the team's new owners.
"Although my tenure was brief, it will forever be memorable," Drew said in a statement issued by his former team.
Wesley Edens and Marc Lasry, both New York investment firm executives, recently purchased the team from former U.S. Sen Herb Kohl for about $550 million. They replaced Drew with Brooklyn Nets coach Jason Kidd this week, and acknowledged they may have made some errors in the way they lured Kidd to Milwaukee.
Drew had no indication he wouldn't return for a second season, despite a 15-67 record, and the messy affair played out in the media for days before the deal was formally announced.
"My swift termination did come as a surprise to me, but I accept new owners Wesley Edens' and Marc Lasry's decision that they've made." Drew said in the statement. "I wish the entire Bucks organization and the great city of Milwaukee nothing but the best in the future."