According to Bob Nightengale of USA Today, the Yanks informed Machado "days ago" that they intended to sign Tulo to a minimum contract in what they believe to be a "no-risk move."
Machado has reportedly already met with the Yankees in free agency, and he is considered the best player available, along with outfielder Bryce Harper.
The Toronto Blue Jays parted ways with Tulowitzki this offseason after he missed the entire 2018 season with injuries to both heels.
In 2017, the five-time All-Star appeared in just 66 games and hit .254 with seven home runs and 26 RBI.
With Yankees shortstop Didi Gregorius expected to miss much of 2019 after undergoing Tommy John surgery, the 34-year-old Tulowitzki is a potential short-term replacement.
While he has been plagued by injuries in recent years, Tulo was one of the best shortstops in baseball for several years during his time with the Colorado Rockies.
During his 13-year MLB career, Tulowitzki has seven seasons with 20 or more home runs to his credit, and he has also won two Gold Glove awards and two Silver Slugger awards.
In 1,286 career regular-season games, Tulowitzki boasts a .290 batting average with 224 homers and 779 RBI.
Signing Tulowitzki doesn't preclude the Yankees from acquiring Machado for several reasons.
For starters, there is no guarantee Tulowitzki will even make the team. Since he signed a minimum contract, New York can cut ties with him if he doesn't look good in spring training, and the Yanks won't incur much of a financial loss.
Also, Machado can play both shortstop and third base, so signing him in addition to Tulowitzki would allow Yankees manager Aaron Boone to mix and match.
If New York ends up with both Machado and Tulowitzki, it would also give general manager Brian Cashman the option of flipping promising young third baseman Miguel Andujar for help elsewhere.
Machado is a potential game-changer who is coming off a career year with 37 home runs and 107 RBI, and there is no reason to think that taking a flier on Tulowitzki means the Yanks are removing themselves from the Machado sweepstakes.