USA Today first reported the news, which the team later confirmed.
McAfee will stand to earn $2.977 million once he signs a contract.
McAfee had a career-high 47.9 yards per punt in 2012 and was a valued weapon of the new coaching staff. He's one of the most popular players on the roster and the Colts were going to figure out a way to keep him.
Follow Kareem Copeland on Twitter @kareemcopeland.