Tulowitzki idolized retired Yankees captain Derek Jeter and has worn No. 2 in his honour.
The Blue Jays released the 34-year-old in December. The ankle required surgery last spring and he missed the entire season.
Tulowitzki is expected to play shortstop while NY starter Didi Gregorius recovers from Tommy John surgery, which he underwent in mid-October, according to the report. Injuries derailed what was shaping up to be a Hall of Fame-level career as he appeared in just a combined 197 games in 2016 and '17 before missing all of this past season due to surgery for bone spurs in both heels. NY also has been talking with Manny Machado, one of the top available free agents.
Once one of the best infielders in baseball, Tulowitzki hit hard times after being traded by Colorado to Toronto in 2015.
The Yankees are expected to pay the former Blue Jay the league minimum, with Toronto picking up the rest of his $20-million salary.