According to multiple reports, Alfredsson is likely to sign a two-year deal with the Detroit Red Wings.
The Boston Bruins were also seriously pursuing the 40-year-old right wing.
In 47 games with the Sens last season, Alfredsson has registered 10 goals and 16 assists for 26 points. He won the Mark Messier Leadership Award on Friday.
It's believed Alfredsson will receive a salary between $4.5 million and $6 million.
Alfredsson has played in 1,178 career regular-season NHL games, all with the Senators, and has accumulated 426 goals and 682 assists for 1,108 points, and 500 penalty minutes.
He was originally drafted by the Senators in the sixth-round (133rd overall) of the 1994 NHL Entry Draft.