The deal, initially reported by the Pittsburgh Post-Gazette, also includes a team option for 2018 worth $14.75 million, sources told Olney.
A formal announcement is expected on Tuesday.
With the contract, the Pirates will buy out McCutchen's remaining seasons of arbitration eligibility and at least two years of free agency. He would have been eligible for arbitration following the 2012 season.
General manager Neal Huntington declined comment to The Associated Press and McCutchen did not play in Monday's spring training game against the Orioles. Steve Hammond, McCutchen's agent, credited both sides for making sure McCutchen will continue to be the cornerstone of Pittsburgh's rebuilding process.
"We were working hard at this," Hammond told The Associated Press. "It was something Pittsburgh wanted and Andrew wanted. We found common ground."
McCutchen, a National League All-Star last season, is one of the Pirates' best young players. He hit .259 with 23 home runs and 89 RBIs last season and made his first All-Star Game. Floating between leadoff and third in the lineup, McCutchen helped keep the Pirates in contention in the NL Central until late July.
He joins left fielder Jose Tabata among Pirates committed to long-term deals. Tabata signed a six-year, $15 million contract with the team in August.
Though Pittsburgh signed Tabata to a long-term deal, McCutchen and the Pirates appeared to be far apart on what a new contract would look like. Hammond said McCutchen wanted to wait until he played at least two full seasons before getting serious about an extension.
"There was some risk in that," Hammond said. "We were willing to take that on and we did."
McCutchen's speed has made him one of baseball's best defensive centerfielders and his charismatic smile and trademark dreadlocks have made him one of Pittsburgh's most popular players.
The Pirates selected McCutchen in the first round of the 2005 draft. He made his major league debut in 2009 and has a career .276 batting average with 51 home runs and 199 RBIs.
Information from The Associated Press was used in this report.