Perez made $381,000 while going 7-5 with a 5.85 ERA last season, when he was sidelined for nearly two months with a broken toe after he kicked a laundry cart in frustration following a June 26 start in St. Louis.
The 24-year-old Perez appeared to be developing into one of the NL's top left-handed power pitchers in 2004, when he had a 12-10 record, 2.98 ERA and 239 strikeouts in 196 innings.
But after not pitching in winter ball for the first time in his career, he had problems with his arm strength early last season and only occasionally showed glimpses of being the power pitcher he was in 2004. He had 97 strikeouts in 103 innings last season.
Perez is pitching in winter ball this year and looked to be in much better shape last week at the team's midwinter mini-camp in Bradenton, Fla., than he was at this time a year ago.
The deal leaves the Pirates with one arbitration-eligible player -- right-hander Kip Wells, who led the NL in losses while going 8-18 with a 5.09 ERA last season.
Teams and players will exchange salary figures Tuesday, but the two sides can reach an agreement anytime before a hearing is held.