The deal is pending a physical, which Oswalt will take Thursday.
The club announced the acquisition of the 34-year-old free-agent pitcher during Tuesday night's game with the Seattle Mariners. He is expected to join Triple-A Round Rock this weekend and general manager Jon Daniels said Oswalt would make his first minor league start on Saturday.
Sources said the contract for Oswalt is that assuming he's called up by July 1, he'll make a prorated $8 million dollars -- $4 million in other words -- and can make another $1 million in incentives based on the number of starts he makes.
A source said Oswalt could be ready to join the Rangers rotation by June 20, meaning he'll need at least three weeks in the minors to build up his arm strength and get used to pitching to live hitters again.
"The bottom line is I think we're better today with Roy in the fold," Daniels said. "Ownership stepped out. This wasn't something we contemplated in the budget."