PITTSBURGH — The Pittsburgh Pirates are nearing agreement on a $6.4 million, four-year contract with their top draft pick that would end a contentious two-month dispute that led the players' union to file a grievance against the commissioner's office.

Pedro Alvarez's major league deal would replace the $6 million minor league deal he agreed to last month, according to two people familiar with the negotiations, both speaking Monday on condition they not be identified because a written agreement had not yet been finalized.

For a Pirates-Alvarez deal to be finalized, the commissioner's office and players' association likely would have to settle a grievance filed by the union Aug. 27 alleging that Major League Baseball violated its labor agreement by approving a verbal deal between Alvarez and the Pirates that was reached shortly after the midnight deadline on Aug. 15.

Arbitrator Shyam Das heard the first day of testimony Sept. 10, with commissioner Bud Selig the first witness, and additional hearing dates were set for today and Wednesday.

Alvarez's agent, Scott Boras, contended Pirates president Frank Coonelly used his influence with MLB to get the deadline extended. Before he was hired last year by Pittsburgh, Coonelly was the MLB legal counsel who drew up the slotting system that recommends specific bonuses for draft picks based on how high they were chosen.

Coonelly, in turn, commended Alvarez for agreeing to a deal his agent didn't want and alleged Boras wasn't looking out for his client.

Neither Boras nor the Pirates would comment Monday on what appeared to be a pending agreement. Alvarez must pass a physical before the any contract can be finalized.

The revised contract, first reported by a Pittsburgh newspaper, would give each side a basis to claim victory in one of the most quarrelsome disputes involving a major league team and a draft pick.

Alvarez would receive a $6 million signing bonus, and the minor league salaries under the contract would total $400,000. Alvarez would earn more if he is on the active major league roster.

For the Pirates, signing the power-hitting third baseman to a major league contract would force them to put him on the 40-man roster and require them to begin using options if they send him to the minors.

Alvarez, a former Vanderbilt player, was the No. 2 pick in the June 5 draft and is seen as a key to the Pirates ending one of the losing runs in pro sports history. They recently tied the 1933-48 Phillies' MLB record of 16 consecutive losing seasons, the longest streak in any of the four major pro team sports.

The 21-year-old Alvarez, who attended the Horace Mann School in the Bronx, hit .349 with 49 homers and 51 doubles in 170 college games. He had 40 homers his first two seasons before a broken hamate bone in his right hand caused him to miss 23 of Vanderbilt's first 24 games last season.