Lincecum and San Francisco reached verbal agreement on a new contract Tuesday pending a physical, which likely will happen early next week before a formal announcement is made by the club.
Lincecum, a two-time NL Cy Young Award winner, gets a $500,000 signing bonus and salaries of $18 million this year and $22 million in 2013.
He would earn an additional $500,000 for winning his third Cy Young, $250,000 for second place, $100,000 for third, $75,000 for fourth and $50,000 for fifth. If he wins the Cy Young in 2012, the bonus for winning again in 2013 would increase to $1 million.
Lincecum also would make $250,000 for being voted NL MVP, $150,000 for being the runner-up, $100,000 for third, $75,000 for fourth and $50,000 for fifth. He would receive a $100,000 bonus if picked to the All-Star game and $50,000 for a Gold Glove.
Lincecum had asked for a near-record $21.5 million in salary arbitration and had been offered $17 million by the Giants. He remains eligible for free agency following the 2013 season.
The 27-year-old right-hander, the winning pitcher in the Game 5 World Series clincher at Texas in 2010, earned $13.1 million last season when he finished a two-year deal worth $23.2 million.
When the sides exchanged numbers last Tuesday, Lincecum's request neared the record amount sought in arbitration. Houston pitcher Roger Clemens asked for $22 million in 2005.
San Francisco's offer was the highest in arbitration history, topping the $14.25 million the New York Yankees proposed for shortstop Derek Jeter in 2001.
Lincecum -- the 10th overall draft pick out of Washington in 2006 -- has been an All-Star in each of the past four seasons. He went 13-14 with a 2.74 ERA last year for his first losing record. The Giants scored no runs while he was in the game in seven of 33 starts, had one run six times and two runs five times, according to STATS LLC.