Taylor, who arrived at the Abbey Business Stadium this Friday for a medical, has shook hands on a two-year deal with the Gloucestershire-based club.
The 32 year-old will officially leave the Coral Windows Stadium by mutual consent next week before joining up with Mark Yeates' Cheltenham squad in time for the new season.
The deal is subject, however, to the relevant paperwork being registered and approved by both the Football League and the Football Association.
Taylor will depart from the Bantams having made just four appearances during a injury-hit campaign last season following his move to the club nearly twelve months ago.
The former Exeter City and Charlton Athletic centre half enjoyed a one-month loan spell with fellow League 1 side Colchester United last September but his campaign was finished early when he required foot surgery back in February.
Taylor has featured in City's three previous pre-season friendlies this summer but Bantams boss Phil Parkinson has agreed to let him go in a bid to find first-team football elsewhere.