The new bowl will start in the 2014 season and it has not been named or sponsored.
The person familiar with the situation tells The Associated Press the game will be a matchup of Big Ten and ACC teams. The person spoke on condition of anonymity because a formal announcement was to come later. ESPN.com first reported the ACC would be part of the new Detroit Bowl.
The conferences will select the teams to play in the new game.
"We are thrilled to be hosting a new bowl game in Detroit that will be anchored by an annual commitment from the Big Ten," Lions president Tom Lewand said. "In addition to showcasing our city and its rich football tradition, this game will be an opportunity for fans to enjoy a postseason matchup featuring one of college football's best conferences."
The new game could spell the end for the Little Caesars Pizza Bowl, which has been played in Detroit and tried to match the Big Ten and Mid-American Conference. The Big Ten often would not have enough bowl eligible teams to send one to the Little Caesars Bowl.
Ken Hoffman, the executive director of the Little Caesars Bowl, did not return a message seeking comment.
The Little Caesars Bowl has been held at Ford Field since 2002. The game was originally called the Motor City Bowl and held at the Silverdome.
MAC Commissioner Jon Steinbrecher said the announcement of the new Detroit bowl was not a surprise, and his league still looks forward to holding its championship game in Detroit. The 2014 season marks the beginning of the new college football playoff, leaving the rest of the bowl scene uncertain as far as which conferences will play where.
"We're all kind of in the process of re-jiggering," Steinbrecher said.
Last season, Northern Illinois became the first MAC team to reach the Bowl Championship Series, playing in the Orange Bowl. That's an honor the league can try to build on.
"Every year is a new year," Steinbrecher said. "You've got to go out and do it again."