The two sides reached agreement shortly before midnight Wednesday at the midway point between their two offers, just hours before they were scheduled to fly to Arizona for a Friday hearing.
The deal includes a $25,000 bonus if Francoeur reaches 685 plate appearances.
"I'm so glad to have this done with," Francoeur said. "Everyone did a great job of getting this done with so I don't have to go out there. I'm happy, excited and looking forward to this season."
The 25-year-old Francoeur is hoping to bounce back from a dismal season in which he batted .239 with 11 homers and 71 RBIs. He was even sent briefly to the minors in hopes of working through his problems.
Despite his poor numbers, Francoeur got a big raise over last season's salary of $460,000. He was seeking a salary of $3.95 million; the Braves offered $2.8 million.
Overall, players hold a 2-1 advantage over clubs in cases that have gone before an arbitrator. Florida second baseman Dan Uggla ($5.35 million) and Washington pitcher Shawn Hill ($775,000) received their offers, while Tampa Bay catcher Dioner Navarro ($2.1 million) had to settle for the club's proposal.
Washington third baseman Ryan Zimmerman is the last player remaining in arbitration. Owners will finish without a winning record for the first time since 1996, when they were 3-7.
The Braves were relieved they didn't have go through the process with any of their players. Earlier this week, they settled with second baseman Kelly Johnson on a $2.825 million contract that includes a $50,000 bonus for 620 plate appearances and $25,000 more for 670.
"Nobody wants to go through that," Braves manager Bobby Cox said. "You don't want to mess with that if you don't have to."