The Kansas City Chiefs have informed L'Jarius Sneed they are prepared to use the franchise tag and are open to consummating a trade if no long-term deal is reached, a source told ESPN's Jeremy Fowler on Tuesday.

Sneed is agreeable to the scenario, which gives him a chance to talk with other teams while the Chiefs remain in play for his services for the 2024 season. Pending league approval, a new contract for Sneed, a free agent, could be worked out as part of a trade to kick in at the start of the new league year. The source stressed that a trade is very much on the table.

The Chiefs are expected to use the nonexclusive franchise tag, which would cost about $19 million for the 2024 season.

Earlier Tuesday, Chiefs general manager Brett Veach had said at the scouting combine in Indianapolis that he was prepared to use the franchise tag on Sneed or defensive tackle Chris Jones if the team can't get them both re-signed by the start of free agency next month.

In 2023, Sneed had by many measures his best season since he joined the Chiefs as a fourth-round draft pick in 2020. Sneed covered the opponents' top receiver on at least 65% of the snaps a league-high seven times during the regular season, according to NFL Next Gen Stats data.

Only once was any of those receivers able to catch more than two passes. Davante Adams of the Las Vegas Raiders had five catches for 73 yards on seven targets against Sneed in a Week 12 game.

Sneed, 27, didn't allow a touchdown catch as the nearest defender in coverage all season until the Chiefs' divisional round playoff win over the Buffalo Bills.

In the AFC Championship Game against the Baltimore Ravens, Sneed lined up against Zay Flowers 21 times. Sneed allowed one catch for 54 yards, but later in the game made one of the biggest plays of the game by knocking the ball from Flowers just before he crossed the goal line. The Chiefs recovered the fumble in the end zone.

In 57 regular-season games, Sneed has 10 interceptions and 40 passes defended. He has one interception and seven passes defended in 13 postseason games.

ESPN's Adam Teicher contributed to this report.