The deal includes a partial guarantee on the second year, sources said.
The agreement is expected to be completed Saturday, according to league sources.
Mack, 27, leaves the Utah Jazz to join the Magic, where he'll be part of the team's rotation of guards.
Mack will be the first free-agent signing for new Magic president Jeff Weltman and general manager John Hammond.
Mack has played seven NBA seasons, including stops in Washington, Philadelphia, Atlanta and Utah. He averaged a career-high 12.7 points and 5.3 assists per game in the 2015-16 season with the Jazz.