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.
Is "American Idol" Sexist?
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.
"I think the judges are somewhat to blame," Ross said. "There's been not a lot of criticism. There's been a lot of 'you're great, you're great, you're great.' They're not really offering any guidelines or direction for the viewers in terms of who's doing well and who's not doing well."
Toscano remained poised as she accepted the news of her elimination, tearing up only during a video clip when she talked about how her now deceased grandfather had inspired her to sing. Then she took the microphone from Seacrest and belted out "Stand by You."
Toscano, a native of Howard Beach, N.Y., had once been considered the contest's front-runner. The judges had often compared her vocal chops to divas Mariah Carey, Whitney Houston and Celine Dion. She is already being compared to Chris Daughtry, Jennifer Hudson and Adam Lambert, previous "Idol" contestants who either looked like they would win or were sent home early.
Pia Toscano 'Idol' Departure Raises Questions
Brian Mansfield, USA Today's "Idol" blogger, called Toscano an old-fashioned "American Idol" throwback in the same vein as a previous winner, Carrie Underwood.
"She can throw down a big ballad," he said. "I'm still waiting to see if she can do more than that."
Perhaps it was her departure from her strong suit, the big ballad, that did her in. Or it could have been voters thinking she was safe and not voting for her.
The past two weeks, Toscano had gotten some competition from Illinois native Haley Reinhart, who has had two strong weeks back to back.
Reinhart seems to have found her niche, choosing songs that showcase her bluesy, soulful voice. This week's cover of Janis Joplin's "Piece of My Heart" was an impressive follow-up to her winning rendition of Elton John's "Bennie and the Jets."
Now only two women remain, Reinhart and Georgia native Lauren Alaina, putting the odds in favor of another male Idol. Favorite fellows Casey Abrams, Paul McDonald and James Durbin were put on notice this week by young gun Scotty McCreery.
The 17-year-old country crooner with the deep voice cut loose on stage with his honky-tonk take on Elvis Presley's "That's All Right, Mama," impressing even Jennifer Lopez with some of his moves. McCreery not only sounds like he's about to sell millions of records but he's acting like he could win this "Idol" thing.
Abrams, who was saved from elimination by the judges two weeks ago, appears to be back on track, telling the judges he had to give "150 percent" in his performances now.
"I want to make them proud," he said of the judges. "I want to make America proud, but I want to make these guys proud."
Durbin, considered to be the second coming of Adam Lambert, showed his sensitive side, performing George Harrison's "While My Guitar Gently Weeps," then weeping at the end.
McDonald, who was in the bottom three last week, turned in a fun, swinging version of Johnny Cash's "Folsom City Blues." Last night, he sat on the couch, looking as surprised as his fellow competitors when Toscano's name was called.
If Americans didn't respond during the vote, they certainly did after the results. Twitter lit up instantly with messages of outrage and disbelief.
Nearly everyone looked surprised when Seacrest announced she was in the bottom three, along with Stefano Lagone. Jacob Lusk took the third seat. Seacrest sent Lusk back to safety, leaving Toscano and Lagone, who nodded his head as if he knew he would be going home.
Instead, it was Toscano, whom many had presumed could win the competition.