WEDNESDAY, 7:20pm: The Dodgers confirmed the signing via press release.
TUESDAY, 1:15pm: Guerrero will indeed be a free agent following the conclusion of his contract and won't be eligible for arbitration, according to Dylan Hernandez of the L.A. Times. Hernandez adds that the contract contains a clause that prevents the Dodgers from sending Guerrero to the minor leagues without his consent after the first year of the contract (Twitter links).
10:48am: The Dodgers have agreed to terms with Cuban infielder Alexander Guerrero on a four-year, $28MM contract that could reach $32MM via incentives, according to MLB.com's Jesse Sanchez (on Twitter).
Early reports that pegged the Dodgers and Guerrero agreeing to a seven-year, $32MM pact proved to be premature. More recently, it was reported that he was nearing a five-year, $32MM contract with the Dodgers after switching over to agent Scott Boras, but bidding was said to be "wide open" once again shortly thereafter.
By talking the Dodgers down to four years at a similar (and potentially identical) guarantee, Boras has managed to commit only his client's age-27 through age-30 seasons. Guerrero, who will turn 27 this December, will be able to hit the open market entering his age-31 season, which should allow him to sign another strong contract if he is able to live up to his potential.
Guerrero batted .290/.402/.576 with 21 home runs in 328 plate appearances in his final season in Cuba's Serie Nacional. That line, along with the .316/.406/.586 that he slashed from 2010-12 in his age 23-25 seasons (h/t: Obstructed View), was enough for Boras to compare Guerrero's power to that of Dan Uggla. While that comp should be taken with a grain of salt, the bar is set pretty low for Guerrero in the Majors, at least among his new peers; Major League second basemen slugged just .376 this year as a group. It should also be noted that Ben Badler of Baseball America did call right-handed power Guerrero's best tool in his late July scouting report (BA subscription required and recommended).
Guerrero also drew interest from the Giants, Rangers, Red Sox, Twins and Reds, but ultimately wound up signing with the first team to which he was connected. With this agreement, the Dodgers seem to have taken themselves out of the running for Robinson Cano, though they could conceivably move Hanley Ramirez to third base and play Guerrero at shortstop. That seems unlikely, as it has long been rumored that the team has no intentions of pursuing Cano on the free agent market, and partial owner Magic Johnson controversially confirmed that thinking to reporters earlier this month. Guerrero's signing also seems to point to the fact that Mark Ellis' $5.75MM club option will be declined in favor of a $1MM buyout.
Guerrero is the second major Cuban star to sign in the past week, as the White Sox recently signed first baseman Jose Dariel Abreu to a record-setting six-year, $68MM contract.