The deal is for one year and $3 million, a source told ESPN's Adam Schefter, confirming an NFL Network report.
McCarron will be an upgrade at quarterback for the Texans behind Watson, who was backed up by Brandon Weeden and Joe Webb III in 2018 and Tom Savage in his rookie season in 2017. Weeden and Webb are both free agents, and Weeden is not expected to re-sign in Houston.
McCarron, a former Alabama standout, has played in 12 NFL games, including seven for the Cincinnati Bengals in 2015 when he took over for an injured Andy Dalton. In his career, McCarron has completed 64 percent of his passes for 928 yards, six touchdowns and two interceptions.