Sources say the deal is imminent. The Lakers will also acquire a future first-round pick from Houston, a league source told ESPN's Jeff Goodman.
The Lakers would make sense as destination for Lin, as the team has the cap space to take on Lin's expiring contract without cutting into any of their 2015 cap space.
The Rockets have made a maximum offer to center Chris Bosh of four years, $88 million, according to sources.
A source told ESPN.com on Friday that the Rockets expect Bosh to commit "soon" to joining Houston after Miami Heat teammate LeBron James told SI.com on Friday that he was leaving to return to the Cleveland Cavaliers.
The Rockets' plan now is to complete their agreed-upon trade of Omer Asik to the New Orleans Pelicans and trade away Lin by Sunday, sources say.
The Philadelphia 76ers had expressed a willingness to trade for Lin depending on what sort of assets Houston is willing to attach to the deal, sources close to the process told ESPN recently.
ESPN The Magazine's Chris Broussard contributed to this report.