Peyton Manning will become the next quarterback of the Denver Broncos, barring a snag during intensified contract negotiations that have commenced under the instruction of the four-time MVP to his agent Tom Condon, according to multiple sources.

Once the Manning deal becomes official, Denver will try to trade Tim Tebow, according to sources.

Manning called Broncos vice president of football operations John Elway on Monday morning to tell him the news. Manning also called the San Francisco 49ers and Tennessee Titans to inform them of his intent to now play for Denver.

Manning instructed Condon to negotiate the finite details of a contract that would conclude with him joining the Broncos after a frenzied but focused process that began when the Indianapolis Colts released him March 7.

The Broncos won't comment on Manning's decision until they have a formal agreement in principle, but as of late Monday night the sides were in the process of finalizing a deal, according to sources. The team plans to introduce Manning at a new conference Tuesday afternoon at their Dove Valley facility in Englewood, CO, a team source added.

The Broncos have tentatively scheduled a news conference for 3 p.m. ET on Tuesday.

Elway and Manning first discussed the parameters of a five-year, $95 million contract during their March 9 meeting in Denver, the first time the quarterback visited a team during his free agency.

Elway then told Manning during last Friday's trip to Durham, N.C. -- where the quarterback has done the majority of his training -- that he wanted to finalize a contract "fair to both sides." Neither side expects any hangups.

However, details such as guaranteed money, structure of the deal and contract language designed to protect the Broncos in the event of Manning's inability to perform due to his prior neck surgeries all will be addressed in the contract, sources said.

Yet the Broncos have few concerns with Manning's medical condition. He already passed the physical exam that a team of Broncos doctors administered during the visit to Durham, a development that Elway informed Manning of when he returned home to Denver that night.

Manning also passed physical exams by San Francisco and Tennessee but he has told all teams that he still has gains to achieve in terms of arm strength and endurance that are related to nerve regeneration due to his neck injury. Nevertheless, his throwing sessions observed by all three teams -- combined with extensive video of previous workouts -- were satisfactory enough for those teams to pursue the most celebrated available player since the NFL's free agency era began in 1993.

"I think it's a great place for him," Broncos defensive end Robert Ayers said outside the Broncos' complex. "I don't think he made a bad decision. I think he made a great decision. Hopefully we can prove him right and hopefully we can win a lot of games here."

Elway now has helped produce Denver's biggest win since he led the Broncos to their last Super Bowl win in January 1999. Elway and Manning have stayed in close contact throughout this process, strengthening a relationship that grew well beyond the golf the two had played together in the past.

Manning is comfortable enough with Denver that he has directed Condon not to negotiate with the 49ers and Titans to avoid any perception that he was seeking financial leverage, sources said.

Only an unforeseen significant obstacle that would develop during the final stages of negotiations would prevent Manning from signing with the Broncos, sources said.

Titans owner Bud Adams released a statement Monday saying: "Obviously I am disappointed, because I thought we would be a perfect fit.

"Now that we move forward, I want our fans to know that our expectations haven't changed -- winning a championship is still the goal. I like our quarterback situation moving forward and we will continue to build the team through free agency and the draft with that goal in mind.

"I also want to commend Matt Hasselbeck and Jake Locker. They were thrown into a very difficult situation. Matt was very good for us last year; and at some point, we expect Jake to be our future franchise quarterback," Adams said in the statement.

49ers CEO Jed York wished Manning well and said he would like to have former No. 1 overall pick Alex Smith back at quarterback.

"We have a contract on the table and it's up to (Alex)," York told CSNBayArea.com. "We'd like for him to be here, and we'll see where it goes."

Smith, perhaps irritated by the 49ers' interest in Manning, visited with the Miami Dolphins over the weekend. York said he hopes Smith is the 49ers' starting quarterback next season.

"I trust (coach) Jim (Harbaugh) and (general manager) Trent (Baalke) to figure it out," York told the website.

Several Broncos players, including running back Willis McGahee and defensive end Elvis Dumervil, celebrated the news on Twitter.