HITC Sport understands Burton set to sign free agent.
Dyer is a free agent after his short-term deal at Burnley expired at the end of last season.
The 33-year-old helped Burnley win promotion to the Premier League but was informed his deal would not be extended at Turf Moor.
Dyer is keen to fix himself up with a new club and a number of sides have expressed an interest in signing the speedy wide man.
However, Burton have moved quickly to agree a deal for Dyer and he will provide pace and width to the side next season.
Dyer, who started his career at West Bromwich Albion, has a wealth of experience having played for 10 different clubs in his career and Burton boss Nigel Clough sees him as a valuable addition to his squad as the Brewers prepare for life in the Championship.
Dyer will become Burton's fifth signing of the summer following the arrivals of defenders Ben Turner and Kyle McFadzean, midfielder Jackson Irvine and striker Chris O'Grady.