A person with knowledge of the discussions told The Associated Press on Monday that details still needed to be finalized. The person spoke on condition of anonymity because negotiations with Penny were ongoing.
Penny cleared waivers and would need to sign by Monday to be eligible for postseason play with the Giants. San Francisco, idle on Monday, is tied with Colorado for the NL wild-card lead.
Penny was released by Boston on Thursday after going 7-8 with a 5.61 ERA this season – including 1-6 in his last 11 starts. The Red Sox signed him to a $5 million, one-year contract last winter after he spent four-plus seasons with the Los Angeles Dodgers.
With Randy Johnson injured, Penny would provide San Francisco with another proven starter to join reigning NL Cy Young Award winner Tim Lincecum, Matt Cain, Barry Zito and Jonathan Sanchez.