The contract is front-loaded, according to a league source, with roughly $13 million coming in the first two years. Daniels will sign the deal after passing a physical.
The Texans confirmed later Thursday that they had agreed to deals with Daniels, running back Derrick Ward and defensive tackle Shaun Cody, but they didn't reveal financial terms.
Daniels played in 11 games last season and started 10 after coming back from reconstructive surgery on his right knee. He caught 38 passes for 471 yards and two touchdowns.
The Texans took Daniels in the fourth round of the 2006 draft, and he became a cornerstone for one of the NFL's most prolific passing offenses. He made the Pro Bowl after the 2008 season, when he caught 70 passes for 862 yards and two touchdowns.
Daniels ranks third in franchise history in receiving yards, behind Andre Johnson (9,164) and Kevin Walter (3,091). During his Pro Bowl season, Daniels and Johnson formed the most productive receiver-tight end pairing in the NFL, with 185 total receptions and 2,437 yards.
Daniels has the distinction of being the first Texan to catch a touchdown pass in a Pro Bowl. But he tore his right anterior cruciate ligament midway through the 2009 season and underwent surgery in November that year.
Daniels was on schedule to be ready for the start of training camp until the spring, when doctors found a stress fracture in his right kneecap, a potentially career-threatening setback. He stayed off the knee for weeks, it healed on its own, and he played in the Texans' 2010 opener, a 34-24 victory over the Indianapolis Colts.
Ward confirmed via Twitter that he agreed to a one-year contract, writing, "Ive re signed with the Houston Texans! Thank you to all my Family Friends and Fans wont let u down! Indy or Bust!"
According to the Houston Chronicle, Ward will be paid $1.75 million next season, half in base salary and half in bonus.
Ward played in all 16 games in his first season with the Texans, backing up NFL rushing leader Arian Foster, who was officially tendered Thursday. Ward rushed for 315 yards on 50 carries with four touchdowns.
The Texans also came to terms with Cody on a two-year, $5.75 million contract with $1.5 million guaranteed, according to the Chronicle. Cody will move to nose tackle to fit into new defensive coordinator Wade Phillips' 3-4 scheme.
In addition to Foster, the Texans announced Thursday that they've offered tenders to five restricted free agents: defensive end Mark Anderson, guard Mike Brisiel, offensive tackle Rashad Butler, wide receiver Jacoby Jones and quarterback Matt Leinart.
The Associated Press contributed to this report.