The 22-year-old New York native signed the deal with Interscope -- which is run by "American Idol" 10th season mentor Jimmy Iovine -- less than two days after her controversial axing from the talent show on Thursday night, According to US magazine.
The label is reportedly rushing to put an album together for the white-hot Toscano.
"Pia is being signed to a deal with Interscope Records, who are rushing her into the studio to record an album ASAP," a source told the magazine.
"After the show, Interscope told her they wanted her and first thing [Friday] morning, Interscope brass started calling every top songwriter and producer in town to get an album together and rush release it," the source told US magazine.
"Papers are being finalized. It's basically a done deal. She's signing. They rushed everything but she's so excited," the source said.
A representative for Interscope Records was not available Saturday to speak with ABC News.
Thursday's announcement of Toscano' departure from the 10th season of "American Idol" came after a rollicking performance by Iggy Pop, in which he shed his shirt to belt out "Real Wild Child."
As host Ryan Seacrest said Toscano's name, the crowd's enthusiasm disappeared. The audience shouted "no" while the judges looked stunned.
Jennifer Lopez, on the verge of tears, said she was angry and speechless. Randy Jackson echoed her anger and Steven Tyler told America their "lack of passion was unforgivable."
Speaking with reporters Friday on a conference call, Toscano already sounded hopeful about her future as a singer.
"You don't know for sure why things happen, but you know, it did! It was my time to go on the show and I'm excited to see what my future holds," she said.
Many critics have said that Toscano's controversial departure from "American Idol" reveals the underlying sexism of voters on the most popular show on television.
Toscano's exit marks the fifth female in a row booted off the show this season. She was assumed by many to be a finale shoe-in.
"If you look at the last three seasons of 'American Idol,' three out of the four final contestants have been men every single time," said Dalton Ross, Editor at Entertainment Weekly. "With only two women left now, it looks like we're headed in that same direction."
Not since Jordan Sparks won four years ago has a female taken the "Idol" crown, and one theory is that young girls, who have bolstered the careers of pop stars ranging from the Beatles to Justin Bieber, may be casting the majority of votes ... and hormones rule.
"Why vote for a gorgeous glamorous girl who might feel like competition to them when they could vote for a wonderful gorgeous cute boy that they can have a crush on?" said psychologist Wendy Walsh.
Of course Pia Toscano does have female fans, so her departure may have more to do with her persona, which has been described as robotic, instead of her gender.
This week, she departed from her trademark ballads to take on her first up-tempo number, Tina Turner's "River Deep, Mountain High," looking less than comfortable moving around the stage.
Or maybe blame can be cast on the quick-to-praise judging of Randy, J-Lo and Steven Tyler.