The former Real Madrid winger was a free agent after being released from Alania Vladikavkaz and is set to join the Royals on a two-year deal pending international clearance.
The 26-year-old Dutchman, who spent a spell on loan at Goodison Park during the 2011-12 season, is a free agent following his release from Russian club Alania Vladikavkaz and looks to be manager Nigel Adkins' latest signing of the summer.
Drenthe's agent, Fabian Veldwijk, revealed a move was close on Monday, and Reading has now confirmed the agreement of a two-year deal, with the option of a third.
"Reading can confirm an agreement has been reached to sign former Real Madrid man Royston Drenthe," a club statement read. "The 26-year-old is set to sign an initial two-year contract with the option of a third.
"The deal is subject to normal ratifications, plus international clearance from the Russia football authorities and the player's former club Alania Vladikavkaz."
Drenthe has been capped once by Netherlands, and most recently played six times for Alania before its relegation at the end of the 2012-13 season.