The deal includes $12.5 million in guaranteed money, the source said.
"It feels great," Hartline said. "It feels great to know hard work and perseverance is worth something. But now it's about winning games. I think we're on the right path. I think we're close.
"I'm excited to see what happens in free agency. We want to win. We're set up so we have cap room to make some moves, and that's one way we can win football games. It's important. And the draft will be important, too. It's exciting."
Hartline enjoyed a breakout season in 2012, his fourth year in the NFL, with 74 receptions for 1,083 yards.
The Dolphins are making former Pittsburgh Steelers wide receiver Mike Wallace their No. 1 target in free agency, which begins Tuesday. The Dolphins want to match Wallace with their two young receivers, Hartline and Davone Bess, to give second-year starting quarterback Ryan Tannehill an array of weapons in the passing game.
Follow Jeff Darlington on Twitter @JeffDarlington.