The contract includes a mutual option for a fourth year that could bring the overall package to more than $33 million, the source said. The agreement is contingent on Eaton passing a physical exam, and is expected to be announced by the club later this week.
A source told ESPN The Magazine's Amy Nelson that Eaton will make $6.875 million in 2007, $7.635 million in '08, and $8.5 million in '09. He has a $1 million signing bonus and there is a $500,000 buyout of the mutual option for 2010. There are incentives clauses for each year, with $250,000 for 200 innings pitched, and an extra $250,000 if he surpasses 220 each year. He will be in Philadelphia on Tuesday to take a physical.
Phillies GM Pat Gillick flew to Seattle over the weekend to get the deal done. He and Eaton met on Gillick's 38th wedding anniversary.
The only other offer Eaton had was from Seattle. But the Cardinals, Padres and Rockies all showed interest. According to a source, the Rangers never made an official offer to Eaton.
Eaton will join Brett Myers, Cole Hamels, Jamie Moyer and Jon Lieber in the starting rotation for the Phillies, who went 85-77 this season and finished three games out in the National League wild-card hunt. The Phillies signed third baseman Wes Helms to a two-year, $5.45 million deal, but lost out to the Cubs in pursuit of their prime target, outfielder Alfonso Soriano.
Eaton, 29, was Philadelphia's first-round pick and the 11th choice overall in the 1996 June draft. Three years later the Phillies sent him to San Diego in a four-player trade that brought Andy Ashby to Philadelphia.
Eaton is 54-45 with a 4.40 ERA in parts of seven seasons with San Diego and Texas. He has pitched only 193 innings over the past two seasons because of a finger injury, but several clubs were intrigued by his potential if he's able to stay healthy.
Texas, Seattle, St. Louis, Colorado and San Diego were among the other clubs that had expressed interest in Eaton.
The Rangers acquired Eaton, Akinori Otsuka and a minor leaguer from San Diego in a trade for Chris Young, Adrian Gonzalez and Terrmel Sledge last January. Eaton underwent surgery in April to repair the tendon in the middle finger of his right hand, and returned to post a 7-4 record with a 5.12 ERA in 13 starts for Texas.
While several prominent free-agent position players have signed contracts this winter, Eaton's deal is the biggest yet by a pitcher.
Randy Wolf, formerly of the Phillies, is also believed to be closing in on a one-year agreement with the Los Angeles Dodgers.
Jerry Crasnick covers baseball for ESPN Insider.