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.
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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."