The contract has a reported value of $90 million, but consummation of the deal was still pending Pence passing a physical, the San Francisco Chronicle said.
The pact includes a no-trade clause and the Chronicle said Pence would be asked to take less money at first in favor of larger paydays in the coming years.
Pence was one of the high-priority free agents for the Giants, who went from World Series champs to scrambling to stay out of the cellar in the NL West. He has been anchoring right field and Friday night hit a personal-best 26th home run of the season.
The Chronicle said the new contract was announced on the same day General Manager Brian Saban and some of his top personnel executives flew to the Dominican Republic to scout a prospect whose identity was not revealed.
The newspaper said the Giants were keenly interested in a Cuban first baseman named Jose Abreu, who was not yet eligible to sign with a U.S. team.