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Reed accepted a signing bonus of a little less than $1.6 million just four days before Monday's deadline for signing this year's draft picks.
The deal is expected to be announced on Friday. The agreement became official after Reed passed a physical examination on Thursday.
The Dodgers now have signed nine of their first 10 picks, the exception being fourth-rounder Ryan O'Sullivan, a right-hander out of Oklahoma City University.
Reed will attend Friday night's game at Dodger Stadium between the Dodgers and Houston Astros and is expected to be made available to the media either before or during that game. Shortly thereafter, he will report to the team's advanced Class A affiliate in Rancho Cucamonga, two levels higher than where collegiate draft picks usually begin their careers.
Reed, 21, attended Cleveland High School in Reseda. As a Stanford junior this spring, he posted a 2.56 ERA in one start and 29 relief appearances and notched nine saves. But the Dodgers view him as a starter in the major leagues, and although his innings will be strictly limited, he will start games for the Quakes.
Reed won't attend the Dodgers' Instructional League camp in Arizona after the season because, as part of the agreement, he will be allowed to return to Stanford in the fall to continue working toward his college degree.
The Dodgers haven't failed to sign their top draft pick since 2005, when they took University of Tennessee pitcher Luke Hochevar, who wound up going to the Kansas City Royals with the first overall pick the following year. Just as Hochevar was then, Reed was being advised by notorious hardball agent Scott Boras.Tony Jackson covers the Dodgers for ESPNLosAngeles.com.