Right-hander Lucas Giolito and the Boston Red Sox are in agreement on a two-year, $38.5 million contract, sources told ESPN, locking up the innings-eating veteran as the starting pitching market begins to move.

The deal includes an opt-out after the first season and includes innings-based performance bonuses that can bring the total value to $40.5 million.

Giolito's deal with Boston gives him an $18 million salary in 2024 and a $1 million buyout if he opts out. If not, his salary for 2025 is $19 million.

There is a conditional option for 2026 -- a $14 million club option if he throws under 140 innings in 2025, and a $19 million mutual option if he throws over 140 innings, with a $1.5 million buyout.

Giolito, 29, logged a career-high 184 innings in a circuitous 2023 that saw him thrive with the Chicago White Sox before struggling in abbreviated stints with the Los Angeles Angels and Cleveland. His 204 strikeouts were the 13th most in baseball, but issues with the home run -- he allowed an American League-high 41 -- led to a 4.88 ERA a year after he posted a 4.90 ERA in 161 innings.

Over the previous three seasons, Giolito looked like one of the best starters in baseball, garnering Cy Young votes and finishing with ERAs of 3.41, 3.48 and 3.53. Giolito is one of six pitchers to throw at least 160 innings in each of the past five full seasons, joining Gerrit Cole, Aaron Nola, Charlie Morton, Jose Berrios and Kyle Gibson.

Both the Red Sox and the New York Mets expressed interest in Giolito, looking to fill out a rotation with holes.

Boston, whose only free agent spending to this point had been signing right-hander Cooper Criswell for $1 million, will add Giolito to a rotation that includes Chris Sale and Brayan Bello, with Nick Pivetta, Kutter Crawford, Tanner Houck and Garrett Whitlock as potential options.

While Boston pursued two-way star Shohei Ohtani and right-hander Yoshinobu Yamamoto, both signed with the Los Angeles Dodgers for more than $1 billion combined, and the Red Sox pivoted to options who would command lower-priced contracts. The Red Sox finished 78-84 in 2023 and replaced chief baseball officer Chaim Bloom with former pitcher Craig Breslow.

ESPN's Jesse Rogers contributed to this report.