The free-agent right-hander reached a preliminary agreement on a $5 million contract, the Los Angeles Times reported Wednesday, a deal that includes a $1.5 million signing bonus.
Martinez, 32, joined his brother, Pedro, with the Boston Red Sox in 1999 after spending his first eight-plus seasons with the Dodgers. The Red Sox, who paid him $5.25 million last season, declined to exercise an $8.5 million option for this year, instead paying a $750,000 buyout.
"We have had discussions with him," Dodgers spokesman John Olguin said. "He's going to take a physical with us. It is not a done deal."
The Times quoted Fernando Cuza, one of Martinez's agents, as saying an agreement has been reached pending a physical examination.
"Ramon has had a lot of success in Los Angeles, in that ballpark, and he wanted to go back to the National League," Cuza told the Times. "All signs pointed to Ramon going back to the Dodgers because he feels comfortable there, he had a lot of success there, and Dave Wallace being there again made the decision very easy."
Wallace, a former pitching coach for the Dodgers, returned to the team recently as an assistant to general manager Kevin Malone after spending three years in the New York Mets' organization.
Martinez was 10-8 with a 6.13 earned run average in 27 starts with the Red Sox last season after going 2-1 with a 3.05 ERA in 1999. He was 7-3 with a 2.83 ERA for the Dodgers in 1998 before undergoing season-ending shoulder surgery in June.
Right-hander Eric Gagne, who figured to be the Dodgers' fifth starter, would likely be a part of that deal, with Martinez becoming the No. 5 starter. Goodwin or White might also be involved in a trade along with reliever Antonio Osuna, the Times said.
Damon, 27, is eligible to become a free agent after the 2001 season. He hit .327 with 16 homers, 88 RBIs, 136 runs scored and 46 stolen bases last season.
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