A source told ESPN that Pagan will receive $40 million in the four-year contract.

Bobby Evans, the team's vice president of baseball operations, said the deal with Pagan was "very close" and the leadoff hitter would be subject to a physical to finalize his return to the reigning World Series champions.

Retaining Pagan was among the top priorities for Sabean this offseason, along with keeping recently re-signed left-handed reliever Jeremy Affeldt and second baseman Marco Scutaro. Affeldt received an $18 million, three-year contract Nov. 14.

The 31-year-old Pagan batted .288 with eight home runs, 56 RBIs and a San Francisco-best 15 triples in his first season with the Giants. Pagan said late in the season and again after the World Series parade that he hoped to return, but wanted to test free agency and sought some job security in the form of a multiyear deal.

On Friday, Sabean said the club had made backup plans to move forward without Pagan or Scutaro in case neither decided to re-sign -- but progress with Pagan apparently happened during the weekend after Sabean said, "We don't have a deal, so that tells you we're not close."

Whether NL Championship Series MVP Scutaro returns is still a question. He very well could have a new suitor in the mix after the New York Yankees said Monday that third baseman Alex Rodriguez will have surgery on his left hip and could be lost until the 2013 All-Star break.

Sabean said he likely wouldn't address his bullpen until after first negotiating with the representatives for Pagan and Scutaro.

The 37-year-old Scutaro hit .362 with three homers and 44 RBIs in 61 games with the Giants after he was acquired in a trade with the Colorado Rockies.

San Francisco declined Friday to tender a contract to closer Brian Wilson, who is working his way back from a second Tommy John reconstructive surgery on his right elbow.

Information from ESPN The Magazine's Buster Olney and The Associated Press was used in this report.