CBSSports.com had earlier reported the agreement, which comes on the heels of Boston's reported deal with free-agent infielder Hanley Ramirez. Fox Sports is reporting that the Red Sox and Ramirez are finalizing a five-year, $90 million contract, though a major league source tells ESPN that terms of the deal are not finalized.
As the Giants have discussed Plan B moves in case they lost out on Sandoval, they've talked about the possibility of pursuing left-hander Jon Lester, sources told ESPN's Buster Olney. The Red Sox also remain engaged in talks with Lester about a possible reunion.
Sandoval, 28, hit .279 with 16 home runs and 73 RBIs last season. He has hit .294 with 106 homers and 462 RBIs in seven big league seasons, all with the Giants.
He has starred in the postseason, hitting .344 with six homers and 20 RBIs in 39 games, helping the Giants win three championships in five seasons. In Game 1 of the 2012 World Series against the Detroit Tigers, he became the first player in baseball history to homer in his first three at-bats in a World Series game. He went on to win the World Series MVP award.
Former teammate Barry Zito nicknamed Sandoval "Kung Fu Panda" after he acrobatically avoided a tag at home plate against the Dodgers in a game in 2008.
Sandoval, who reportedly rejected a three-year, $40 million contract extension offer from the Giants in March, was paid $8.25 million in 2014.
The Giants made a one-year qualifying offer of $15.3 million to Sandoval for 2015 that he rejected, ensuring them draft-pick compensation if he signs with another team.
By adding Sandoval, the Red Sox are trying to upgrade a position in which they ranked 29th in baseball in OPS, with their .580 mark 121 percentage points below the league average of .701 at third base.
Although Ramirez played predominantly at shortstop for the Dodgers, he is unlikely to man the position for the Red Sox because of the presence of 22-year-old shortstop Xander Bogaerts, who is regarded as highly as Ramirez was after he signed with the Red Sox in 2000 as a teenager in the Dominican Republic. The Red Sox instead might target Ramirez to play in the outfield.
The Red Sox already have a logjam in the outfield, though, with potential starters in Yoenis Cespedes, Rusney Castillo, Mookie Betts, Shane Victorino and even Allen Craig, with Jackie Bradley Jr. potentially in reserve. The signing of Ramirez to play the outfield would suggest the Sox are planning to trade an outfielder, with Cespedes, who is a year from free agency, a leading candidate.
ESPNBoston.com's Gordon Edes contributed to this report.