The two-time reigning NL Cy Young Award winner had been set to ask for an arbitration-record $13 million salary for 2010 during a hearing Friday in St. Petersburg, Fla.
Lincecum gets a $2 million signing bonus, $8 million this year, $13 million in 2011 and the chance to earn performance and award bonuses. The agreement is subject to a physical.
The tiny guy his teammates call "Franchise" and "Freak" is getting a monumental raise from his $650,000 salary last year.
Things came together Friday morning in a surprising development, Giants vice president of baseball operations Bobby Evans said in a phone interview before leaving Florida. The Giants did offer Lincecum a three-year deal.
"It's a win-win for both sides," Evans said, noting nothing will be official until Lincecum passes the physical. "I had no idea. I was not expecting a settlement at all. I don't know what changed. It's always ideal to have something both agree to as opposed to a third party figuring it out. We can focus on baseball from here forward."
In addition to his salary, he would earn $200,000 for pitching 225 innings, a figure he reached in each of his two full seasons. He would get $500,000 for each Cy Young Award, $250,000 for second, $100,000 for third, $75,000 for fourth and $50,000 for fifth.
He also would get $100,000 each time he's an All-Star, $100,000 for NL MVP, $75,000 for World Series MVP and $50,000 for League Championship Series MVP.
The 25-year-old right-hander said last week he thought the Giants might bring up his offseason marijuana arrest in Washington state during a hearing, but insisted there would be no hard feelings. He was hoping for a multiyear deal to stay put in San Francisco.
This has to be a big relief for both sides heading into the start of spring training next week in Scottsdale, Ariz. The Giants offered their ace $8 million when the parties exchanged numbers last month, and there was thought they might have lost and had to pay him even more come 2011. Lincecum, who is eligible for free agency after the 2013 season, said he realized through the process there's a tough business side to all of this.
A message left for Lincecum on Friday morning wasn't immediately returned.
"Going to arbitration, everybody knows what can happen and the feelings that can get hurt," he said last week. "I'm just trying to keep an open mind. If anybody knows my flaws, I do. If they're going to point them out and that has to happen, then whatever. I know I've got to get better. I don't feel like my feelings are hurt."
Lincecum, already a two-time All-Star, owns a 40-17 record and 2.90 ERA with 676 strikeouts in three big league seasons. He won 18 games in his first Cy Young season of 2008, then 15 to win again last season after leading the league with 261 strikeouts and tying for top marks in the NL with four complete games and two shutouts.
Two other top pitchers recently received five-year contracts, with Detroit's Justin Verlander getting $80 million and Seattle's Felix Hernandez $78 million. Lincecum tried not to think too much about their deals and focus on his own situation.
On Jan. 19, the same day salary numbers were exchanged, Lincecum agreed to pay $513 to resolve marijuana charges against him in Washington state.
The pitcher originally faced two misdemeanor charges of marijuana and drug paraphernalia possession stemming from a traffic stop on Oct. 30. The charges were reduced to a civil infraction.
Lincecum appeared in Clark County District Court before Judge Darvin Zimmerman, and Giants managing partner Bill Neukom was in court in a sign of support for Lincecum.
He paid a speeding ticket separately.
"I think a lot of growing up has to do with experiences you go through, whether that be good or bad," Lincecum said after winning his second Cy Young Award. "There's different people who go through different experiences that shape them. It's unfortunate also that you have to go through the bumps, like I am going through, to get to where you think you need to be. It's just about changing yourself and looking for the right road to take instead of making it hard on yourself."
Information from The Associated Press was used in this report.