Beachum will earn $4.5 million in the first year and can earn up to $6 million if he reaches his incentives, the source told Schefter.
Beachum is likely to be asked to restructure the second year of the contract or be released next year, as the source told Schefter that Beachum has a $10 million roster bonus that he would have to be great to achieve.
The move came on the same day that the Steelers signed former Denver Broncos tackle Ryan Harris to a two-year deal.
Beachum greatly outplayed his seventh-round draft billing from 2012, earning three-year starter honors as the left tackle in Pittsburgh before tearing his ACL in Week 7 last season against the Kansas City Chiefs.
Beachum, 26, offsets lack of size for the position (6-foot-3, 303 pounds) with good footwork and hand placement. The Steelers tried to re-sign Beachum before the 2015 season, but both sides could not reach an agreement on a long-term contract.
ESPN NFL Nation reporter Jeremy Fowler contributed to this report.