The Ospreys skipper's current deal, agreed in March 2015, was due to expire at the end of this season.
The 30-year-old has played 94 times for Wales and in six Tests for the British and Irish Lions since making his debut for the regional side in 2005.
Confirmation of the new deal will follow, with Jones joining Dan Biggar and Rhys Webb in renewing a dual deal.
Fly-half Biggar was the first player to renew his dual contract on 4 December, with Webb following suit.
BBC Wales Sport has learned clubs from around the world showed an interest in securing Jones' signature.
Dual contracts are 60% funded by the WRU and 40% by the regions.
Jones is one of the key players in the Welsh game. He is approaching 200 appearances for Ospreys and has been the first-choice lock under coach Warren Gatland since the New Zealander took over in 2007.
He has also captained Wales and led the Lions in the third Test against Australia in 2013, when the tourists beat the Wallabies 41-16 to clinch a 2-1 Test series win.
Wales and Ospreys second row forward Alun Wyn Jones has agreed an extension to his national dual contract.