The two sides still have until July 15 to work out a long-term deal. The Cowboys had placed the franchise tag on Prescott on March 18.
By signing his franchise tender, Prescott will be contractually obligated to report to training camp on time, whether or not he and the Cowboys can figure out a long-term deal.
Prescott's decision to sign the franchise tender is not an indication that a long-term agreement is close, league sources told ESPN's Ed Werder.
The fact that Prescott will be one of the highest-paid players in the NFL -- and the potential his franchise tag increases by a mandatory 20% next season to $37.7 million with a flat or lower cap in 2021 -- is incentive for Dallas to secure a long-term deal before the July 15 deadline.
Said one source of the pressure on the Cowboys: "Their problem is the second year, because this salary cap is going to crash unless there's an intermediate deal. They would have to gut their team to keep him then. So there's even more incentive for the Cowboys to do a long-term deal with Dak because of the coronavirus and where the cap might be next year."
This offseason, the Cowboys made a long-term offer to Prescott that would put him among the highest-paid quarterbacks in the NFL, ESPN's Todd Archer previously reported. Seattle's Russell Wilson is the highest paid at $35 million per season, followed by Pittsburgh's Ben Roethlisberger at $34 million.
Cowboys owner and general manager Jerry Jones and executive vice president Stephen Jones have repeatedly expressed their belief that Prescott is the team's quarterback of the future and capable of leading the franchise back to a Super Bowl. Prescott, who turns 27 on July 29, has said on multiple occasions that he never wanted to leave the Cowboys.
The Cowboys had hoped to sign Prescott to an extension last offseason that would have guaranteed him nine figures, but the quarterback bet on himself, willing to play for $2.02 million in 2019.
Prescott completed 388 of 596 passes for 4,902 yards and 30 touchdown passes last season. Despite career highs in yardage and touchdowns, Prescott had his worst record as a starter (8-8) as the Cowboys missed the playoffs. His growth as a passer, however, was obvious as the Cowboys had two 1,000-yard receivers in Amari Cooper and Michael Gallup.
The Cowboys took Prescott with their second pick of the fourth round in the 2016 draft -- a compensatory pick at No. 135 overall. When Tony Romo went down in the 2016 preseason with a back injury, the Cowboys were forced to turn to Prescott, and he has started each of Dallas' 64 games since.
Prescott was the NFL Rookie of the Year in 2016 after throwing 23 touchdown passes to four interceptions as Dallas went 13-3. The Cowboys had home-field advantage in the NFC but lost in the divisional round of the playoffs to the Green Bay Packers on a last-second field goal.
In 2018, Prescott guided the Cowboys back to the playoffs after a 3-5 start and won his first postseason game in the wild-card round against the Seahawks. The Cowboys lost in the divisional round to the Los Angeles Rams.
In his four seasons, Prescott ranks among the top five quarterbacks in wins (40), passing touchdowns (97), rushing TDs (21) and Total QBR (68), becoming one of the NFL's biggest bargains. He earned $4 million in salary and signing bonus the past four seasons.
Prescott has thrown for 15,778 yards with 36 interceptions in his career. He has 12 300-yard passing games, one behind Pro Football Hall of Famer Troy Aikman for second in team history. Prescott's 21 career rushing touchdowns is one more than Hall of Famer Roger Staubach for the most by a quarterback in team history.
ESPN's Todd Archer contributed to this report.