The deal includes a club/vesting option for the 2016 season. The Giants said Monday that Casilla is scheduled to take his physical Tuesday.
The World Series champions have done their best this winter to keep the 2012 roster intact, re-signing center fielder Angel Pagan, second baseman Marco Scutaro and lefty reliever Jeremy Affeldt to multiyear contracts.
Casilla went 7-6 with a 2.84 ERA and 25 saves in 73 appearances covering 63 1/3 innings last season.
He initially took over the closer role after 2010 major league saves leader Brian Wilson was sidelined in April with an elbow injury that required his second Tommy John surgery.
The 32-year-old Casilla was eligible for arbitration this winter and could have become a free agent next offseason.